Nigeria’s Senate has approved the appointment of Olayemi Cardoso as the country’s new central bank governor, along with four deputies. Cardoso, a former executive at Citi and an ally of President Bola Tinubu, will take on the role for a five-year term. The appointment comes amid a steep decline in the value of Nigeria’s currency, the naira, against the US dollar. One of Cardoso’s immediate challenges will be to stabilize the currency, which has reached record lows in recent weeks.
The new governor’s appointment follows Tinubu’s efforts to align official and parallel market exchange rates and implement reforms in Nigeria’s economy. However, the naira’s value has continued to fall, leading to a shortage of foreign exchange and a widening gap between official and black-market rates. Cardoso’s immediate priority is to clear the backlog of approximately $6.8 billion owed by the central bank in the foreign exchange market. The government is also seeking to attract liquidity from foreign investors and secure a $3 billion loan for the state oil company to inject liquidity into the economy.
In addition to stabilizing the currency, Cardoso also faces pressure to tackle inflation, which is currently at an 18-year high. The central bank’s leadership has scheduled a meeting to set interest rates, but it was postponed indefinitely due to uncertainty surrounding the bank’s leadership. Cardoso has pledged to adopt an evidence-based monetary policy and to avoid making decisions based on whims. Senators questioned Cardoso about the central bank’s independence from the presidency and its past intrusions into industrial policy. Cardoso emphasized the need to refocus the central bank on its core mandate and limit its direct development finance interventions in order to support economic growth.