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The Democratic Front (TDF) has lauded the Governor of the Central Bank of Nigeria (CBN), Olayemi Cadoso, for his “courageous” monetary reforms, which they believe are yielding positive results in Nigeria’s economic recovery. The group made these remarks in a statement released by Chairman Danjuma Muhammad and Secretary Wale Adedayo, commending Cadoso’s efforts to stabilize the economy amid challenges.
“We commend the efforts made so far by the Governor of the Central Bank of Nigeria, Mr. Olayemi Cadoso, on the sweeping reforms he has courageously introduced in the implementation of monetary policies, which have significantly impacted the current upward trajectory of Nigeria’s economy,” the statement read.
TDF’s endorsement of Cadoso’s reforms aligns with the findings of the latest edition of the World Bank’s Nigeria Development Update (NDU). The report highlighted several policy missteps that contributed to Nigeria’s economic woes between 2015 and 2023, including the use of Ways and Means financing, large credits at subsidized rates, restricted access to foreign exchange (Forex) for over 900 products, and the maintenance of an overvalued exchange rate. These policies, according to the World Bank, triggered inflation, reaching its highest level in 28 years.
However, TDF defended the fiscal decisions made by the government during that period, pointing to external factors such as the global economic downturn from 2015 to 2021. “We expect that the undeniable fact that the Nigerian government of 2015 inherited an empty treasury economy, mainly dependent on crude oil export, should inform general perception,” TDF noted, highlighting the impact of crude oil prices dropping to a 13-year low in 2016 and Nigeria’s subsequent recession.
TDF also referenced the COVID-19 pandemic as a significant disruptor of global and Nigerian economies. “No economy in the world anticipated the devastating effects of COVID-19,” the statement added, explaining that the pandemic forced Nigeria to divert borrowed funds meant for infrastructure development to support failing businesses and households.
Since his appointment, Cadoso has taken decisive steps to reverse past policy missteps. “Under his leadership, the Monetary Policy Committee (MPC) has impressively implemented five interest rate hikes,” TDF stated. These hikes, which increased the rate from 18.75% to 26.75% as of July 2024, were praised by global investors for stabilizing the local currency under a free float regime, a critical factor in attracting investments.
TDF also pointed to Cadoso’s achievements in managing inflationary pressures, stabilizing the foreign exchange market, and clearing a backlog of Forex obligations. “He has restored transparency to foreign exchange transactions and eliminated arbitrage opportunities that plagued the system,” TDF added. As a result, Nigeria’s external reserves have risen from $33.6 billion in October 2023 to $38.9 billion.
Despite the current hardships caused by the devaluation of the Naira, TDF remains optimistic about long-term gains. “The present cheap value of the Naira against the dollar, coupled with the temporary hardship it has brought upon consumers, was unavoidably necessary for the long-term economic reform of the Tinubu administration to succeed,” they said. TDF predicted that the economy would stabilize within a year.
Cadoso’s re-capitalization policy, aimed at strengthening the liquidity of commercial banks, was also commended. “The first objective of the economic reforms to pull Nigeria back from the brink of fiscal collapse has been achieved,” TDF declared, emphasizing the importance of Cadoso’s role in ensuring the success of President Bola Ahmed Tinubu’s broader economic reforms.
In closing, TDF urged Cadoso to stay the course. “We cannot afford to fail the President and the nation,” the statement concluded.
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