Abuja, Nigeria: Central Bank Governor Olayemi Cardoso has reaffirmed his administration’s unwavering commitment to macroeconomic stability and a more resilient banking sector.
Cardoso said this in a statement issued by CBN’s Acting Director, Corporate Communications Department, Hakama Sidi-Ali.
He spoke during a fireside chat moderated by Andreas Voss, the Chief Country Representative, Deutsche Bank Nigeria, at the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos.
He said that the recapitalisation for Nigerian banks was making progress and would result in even stronger institutions that could withstand shocks and finance growth.
According to him, key drivers of renewed investor confidence are the CBN’s reforms and stabilisation of the Naira, as extolled by members of the EU Chambers.
Cardoso said that headline inflation was currently elevated.
“However, it is decreasing as a consequence of collective efforts. It is anticipated that the advantages of the CBN tightening posture will persist.
“We will protect the stability that has been re-established in the financial system with the utmost zeal.
“Our primary objective is to maintain that stability while simultaneously addressing inflation and ensuring that the financial system is sufficiently resilient to facilitate corporate lending and investment,” he said.
On the impact of high lending rates on investment, the CBN governor said that there was a substantial potential for interest rates to decrease in the future.
According to him, this will happen as inflation continues to decline and as markets become more efficient in allocating capital.
“That is the environment in which stronger corporate lending and higher levels of investment will naturally follow,” he said.
Cardoso said that the CBN’s recapitalisation directive, which mandated banks to increase their minimum capital, was explicitly intended to fortify the financial system.
He said that it would also guarantee that the financial system was capable of supporting a wider range of economic activities.
He also emphasised the importance of technology-driven solutions to deepen access and address poverty, as well as efforts to expand financial inclusion and fortify the fintech ecosystem.
The CBN governor identified a positive development in the form of increased collaboration with the fiscal sector, which includes the Ministries of Finance, Industry, Trade and Investment and the Budget Office.
“This collaboration will enable the country to maintain reforms and achieve long-term stability,” he said.