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The Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, has charged Nigerians with embracing the economic fundamentals to tame inflation.
Mr Cardoso stated this on Tuesday, October 15, during a question-and-answer session at the 30th Nigeria Economic Summit in Abuja. The session addressed pressing issues surrounding Nigeria's economy, monetary policy, and rising inflation.
As he discussed the country's economic landscape, Cardoso emphasised the critical importance of restoring economic fundamentals to ensure long-term stability.
Highlighting Nigeria's economic challenges, Cardoso stated, "I see no substitute for the fundamentals of the economy. Before you start talking about trade-offs, we must agree that we have to get the fundamentals of the economy working."
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He underscored the necessity of efficient institutions and balanced supply-demand dynamics as primary economic concerns.
"We need to go back to addressing the fundamentals," Cardoso added, noting that without a strong economic base, trade-offs would only offer short-term solutions.
The governor also discussed recent monetary policy decisions, including raising interest rates from 26.75% to 27.25% and adjusting the bank's Cash Reserve Ratio (CRR).
He acknowledged that these policies, aimed at curbing inflation, have stirred debate.
However, Cardoso remained firm, pointing out that high inflation erodes purchasing power, discourages investment, and ultimately impacts the productive sector.
"Taming inflation is key because if you do not tame it, it has a major throwback. It can deter investment and significantly reduce purchasing power," he explained.
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Cardoso expressed cautious optimism, suggesting that a balanced approach would eventually allow for lowered interest rates as inflation moderates, making it easier for businesses to thrive.
"We hope that as inflation begins to moderate, interest rates start to come down," he said, outlining the CBN's long-term vision to stabilise Nigeria's economic environment.
Through his responses, Cardoso reinforced the CBN's commitment to economic stability while calling for a collective effort to diversify Nigeria's economy, especially from its dependence on oil, to achieve resilient growth.