Nigeria Senators Back Ex-Citi Executive as New Central Bank Head
(Bloomberg) -- Nigerian lawmakers approved the appointment of Olayemi Cardoso to a five-year term as the next central bank governor, as Africa’s biggest economy grapples with a plunging currency and runaway inflation.
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Cardoso, former Citibank Nigeria Ltd. chairman, and four deputy governors were confirmed at a Senate hearing in the capital, Abuja, on Tuesday. They were appointed by President Bola Tinubu in acting capacities on Sept. 22.
The approval paves the way for the Central Bank of Nigeria to hold a monetary policy committee meeting after one scheduled for this week was postponed following the resignations of five panel members. Suspended Governor Godwin Emefiele and his four deputies quit last month.
The appointment of Cardoso, 66, provides an opportunity for the new leadership to restore the institution’s credibility, which was eroded by Emefiele’s unorthodox policies during his nine-year tenure.
Cardoso in the hearings stressed the need to restore the central bank’s autonomy and credibility by refocusing on its core mandate and ensuring a culture of compliance.
“Much has been made of past CBN forays into development financing such that the lines between monetary policy and fiscal intervention have become blurred,” he said. “In refocusing CBN to its core mandate, there is need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth.”
He also said that the central bank will address Nigeria’s high inflation by adopting an evidence-based monetary policy. “We shall not be making decisions based on a whim.”
Nigerian inflation is at a more than 18-year high and its currency is among the world’s worst performers this year after the implementation of reforms to liberalize the nation’s foreign-exchange market.
Nigeria’s benchmark interest rate has been increased by 725 basis points since May 2022 to a record high of 18.75% to curb inflation. Price growth in the West African nation is being fanned by the scrapping of costly fuel subsidies and exchange-rate pressures.
The government said last month it would suspend raising gasoline prices and declared a state of emergency in July to allow the authorities to take exceptional steps to improve food security and supply, as part of efforts to contain inflation.
The four deputy governors whose appointments were confirmed by the Senate are Emem Usoro, Muhammad Dattijo, Philip Ikeazor and Bala Bello.
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