Olayemi Cardoso completed three years as Governor of the Central Bank of Nigeria in September 2026. In that time, the central bank moved away from the administrative approach of the previous administration and toward a market-based framework built on unification, tighter money, and clearer communication.
When Godwin Emefiele took office, his mandate was monetary and price stability, financial stability, and development finance. Within months his resolve was tested. The naira went into free-fall, trading at over N365/$1 in the parallel market in August 2017, and the Money Market Association halted trading. The economy slipped into recession. The response was to manage scarcity. The CBN created multiple exchange rate windows, including NAFEX for investors, exporters and importers introduced in 2017, and NIFEX for weekly bank auctions. Forty-one items were restricted from accessing official dollars. To close the gap and deter speculation, the Bank pumped roughly $20 billion into the market through these windows between 2016 and 2018. That intervention was made possible by oil. Crude rose from $30 per barrel in mid-2016 to about $80 by 2018.
As earnings improved, external reserves climbed from $30.360 billion in May 2017 to $47.4 billion a year later, with projections then of $55 billion by end-2018. The supply of dollars helped. The official rate stabilized around N305/$1. Inflation also eased, falling from a peak of 16.25% to 12.48% in April after the Monetary Policy Rate was held at 14% from July 2016. Financial stability was maintained, with no systemic bank failures despite the recession, which Emefiele’s team counted as a key achievement.
But the model had costs. The IMF said the multiple rates created distortions and discouraged investment. Portfolio investors agreed. Net portfolio investment fell to -$1.704 billion in 2016 as foreigners complained of unclear policy direction and difficulty repatriating funds. Unemployment also kept rising, reaching 18.8% in Q3 2017 from 16.2% in Q2, so that even as inflation fell, the misery index remained high. Emefiele’s team pulled the economy out of five straight quarters of contraction, but the trade-off was clear: monetary policy could not target inflation, growth and jobs at the same time.
Cardoso’s three years have been a deliberate break from that model. From September 2023, the focus was to remove distortions first. In year one, all FX windows were collapsed into one. The naira was allowed to find a market price. It depreciated, but arbitrage ended and liquidity improved because investors could now exit without waiting for a CBN allocation. To rebuild confidence, the Bank in that first year verified and settled a $7 billion FX backlog.
That single action reopened correspondent banking lines for airlines, manufacturers and portfolio investors.On inflation, Cardoso chose the same tool Emefiele used, but more aggressively. With inflation driven by subsidy removal and FX pass-through, the MPC raised the MPR repeatedly over three years and mopped up liquidity. The CBN also cut back on quasi-fiscal lending and direct intervention programs like Anchor Borrowers, shifting development finance back to banks and fiscal authorities. Communication became central. Regular MPC communiques and data releases replaced surprise circulars, with the aim of reducing the policy uncertainty that drove capital flight in 2015 and 2016.
Three years in, the outcomes reflect different foundations for stability. Emefiele’s stability was oil-backed and supply-driven. $80 oil funded reserves and the $20 billion intervention kept the naira steady for a period, but left the market dependent on CBN allocations. Cardoso’s stability after three years is rule-based and demand-driven. Reserves are now supported more by portfolio inflows and remittances than by intervention. The exchange rate is volatile, but it is also transparent. Financial system stability has been maintained through stronger supervision and stress tests rather than direct bailouts.
The dilemma remains unchanged. Just as Emefiele could not bring unemployment down while fighting inflation, Cardoso’s prioritization of price and FX stability in the first three years has meant slower growth and jobs. The misery index is still a problem because the central bank can realistically target only two of the three variables at any time.In sum, Emefiele’s four years were about surviving a crisis with controls. Cardoso’s first three years have been about resetting the rules with markets. The $20 billion spent to ward off speculators bought temporary stability. Cardoso has spent three years buying credibility instead, by unifying the market, clearing legacy debts, and letting price do the work.
Whether that translates into lower inflation and jobs will depend on what happens outside the CBN, just as Emefiele’s success ultimately hinged on fiscal actions such as domestic refining to cut fuel imports.Disclaimer: This is an interpretative analysis based on public CBN policy direction from September 2023 to August 2026. For official figures, refer to CBN statistical bulletins and MPC communiques.
