Prior to the Senate screening, Dr. Muda Yusuf, the Director General of the Centre for Promotion of Private Enterprise (CPPE), stated that Dr. Olayemi Cardoso would require more than just character to succeed in his new role at the Central Bank of Nigeria (CBN). If he wanted to succeed, he needs to concentrate on these roughly ten concerns.
In a document shared, Yusuf wrote: “Cardoso has the pedigree, disposition and character that the position demands” but admitted the job at hand requires much more than character to get the right result.
The economist said: “Cardoso is assuming the leadership of the CBN at a very crucial time in our economic history. There is a serious confidence crisis in the foreign exchange market fueling an unprecedented speculative onslaught on the naira. The economy is grappling with severe adverse effects of depreciating exchange rate, soaring energy costs, ravaging inflationary pressures, a huge backlog of foreign exchange obligations that need to be cleared and debt service obligations that need to be redeemed. Sadly, these outcomes are manifesting at a time when the country’s foreign reserves have been substantially encumbered.”
“There is an apparent deceleration in the pace of economic reforms as the outcomes are at variance with expectations. The social costs of the reforms were substantially higher than anticipated, resulting in push-backs from the civil society.”
“The economic management orthodoxy of market forces is being called into question in light of the social outcomes of the market-oriented reforms. There is a measured re-emergence of the political economy with the reappearance of fuel subsidies and divergence in exchange rates. This is an economic management quandary that the new economic team would have to manage, and urgently too. And the CBN has a key role to play in this.”
To the extent that reserves allow, the CBN must guarantee deliberate and open intervention in the foreign exchange market to reduce volatility. He stated that in addition to the I and E window, the financial industry now needs to establish an independent window where money can move freely and without restrictions.
“This is necessary to avert the diversion of remittances to other jurisdictions or the black market. We cannot afford to live in denial at this time. The clearance of the backlog of forex obligations should be accorded high priority to restore the confidence of domestic and foreign investors,” he said.
Additionally, he advocated for the financial system to be strengthened, stating that the deposit money banks’ role in financial intermediation must be strengthened. He stated that mobilizing financial resources from the economy’s surplus end is part of this obligation.
