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Cardoso Swings into Action After  Sterling Performance at Screening

 Ugo Aliogo

Given the slant of most of the reviews of the sterling performance of Dr. Olayemi Cardoso at the screening by the Senate last week, there is no doubt that the new Governor of the Central Bank of Nigeria came well prepared for the job.

Observers said, right from his entry into the hallowed chamber of the National Assembly, Cardoso did not leave anyone in doubt about his maturity, comportment, mastery of the nation’s financial sector as well as his humility and his regard for constituted authorities.

For a Central Bank said to have lost focus, one will certainly not be surprised at the wisdom of President Bola Tinubu to headhunt a tested player whose temperament is capable of dousing the tension created by some missteps of the previous holder of the office.

Recently, President Tinubu announced to the world that the apex bank was to undergo a comprehensive forensic report as part of reforms of the bank. Analysts said the depth of the rot amid weighty allegations of impropriety informed the choice of the new CBN Governor. It was therefore not surprising that the Senators were ready to subject Cardoso and his four deputies to serious scrutiny on Tuesday when they appeared for screening.

Fixing Corporate Governance Issues in CBN

The high point of his pledges to Nigerians at the screening was the promise to enhance transparency, fix corporate governance, and ensure confidence in the autonomy and integrity of the bank.

“We need to promptly find a way to take care of that. It would be naive for us to expect that we’ll be making too much progress if we’re not able to handle that side of the foreign exchange market,” he said.

The new CBN governor said he would maintain price stability, revert to evidence-based monetary policies, and discontinue his predecessor’s unorthodox monetary policies to bolster the country’s naira currency.

Treating all the questions thrown at him with caution, humility, and brilliance, Cardoso, a former chairman of Citibank Nigeria assured the lawmakers that breaches of the CBN Act as recorded by his predecessors would not be the case under his administration.  To the admiration of the senators, Cardoso also promised that his administration would inculcate a culture of compliance into the apex bank by adhering strictly to the CBN Act 2007.

“I believe that the Central Bank under our watch will have no choice but to embrace a culture of compliance,” he assured the Senate while responding to questions at his and four deputy governors’ screening.

Zero Tolerance for Abuse of Compliance

Regarding some of his predecessors breaching legislation, Cardoso, who was also a former Commissioner in Lagos State assured the lawmakers that “you won’t have that during our administration,” adding that his team would not tolerate such behaviour. 

“We will not wait for oversight to come and tell us what to do. We will ensure that by the time the system is passing through us, we catch it and we deal with it,” said Cardoso who promised zero tolerance for abuse of compliance. 

“That is a cultural shift, a change in mindset, but we will make sure it happens,” he asserted.

At a point, Senate President Godswill Akpabio had asked Cardoso if he would be influenced and hijacked by politicians when he assumed office.

Responding, the CBN governor said, “It is important that we, who are considered for this position today, understand that this is a position of trust.

“With that comes a huge responsibility to meet up with that trust. I know that a lot of time and effort has gone into choosing the people who are standing here for nomination today.

“As far as I am concerned, under my leadership, we will not be hijacked by anybody. The idea is to ensure that we do what is right when it is right, and how it is right. We’ve seen what the effect of not doing right has been, and we do not intend for that to be repeated.”

To underscore the seriousness of his new assignment and his resolve to make a difference, Cardoso on his X platform on Wednesday reiterated his commitment to ensuring that the leadership of the organisation will work to regain the trust and integrity of the apex bank.

For Nigerians who appeared to have lost hope in the economy as a result of the current distortions, Cardoso said the CBN will be repositioned to grow the size of the Nigerian economy to an ambitious value of $1 trillion in Gross Domestic Product (GDP) in the next eight years.

He also vowed to embrace a culture of compliance and internal control of commercial banks, halt the continuous fall of the Naira in the foreign exchange market, and tackle the rising inflation rate.

As a man who knows his onions, the new CBN Governor emphasised the need to restore the apex bank’s independence and credibility by refocusing on its core mandate and ensuring a culture of compliance.

No Distractions

One of the issues that bothered Nigerians about the activities of the immediate past management of the CBN was its foray into virtually all the sectors of the economy, a development blamed for most of the missteps of the past. The CBN was said to be competing with other agencies of government with the funding of other sectors.

To a brilliant financial guru, the concern and the anxiety of the lawmakers over this subject matter was cleverly used to warm himself into their hearts by pledging that the apex bank under his leadership would be focused and would not be distracted.

He said, “Much has been made of past CBN forays into development financing such that the lines between monetary policy and fiscal intervention have become blurred. In refocusing CBN to its core mandate, there is a need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth.”

Another source of worry is the rising inflation which surged to 25.80 per cent last month, 1.72 per cent points higher than the 24.08 per cent recorded in the previous month. The increase reflects the impact of the removal of petrol subsidy and the devaluation of the official exchange rate on consumer prices.

On addressing the rising inflation, Cardoso noted that the new CBN leadership would “adopt an evidence-based monetary policy and shall not be making decisions based on a whim.”

Cardoso said there are short-, medium–, and long-term measures to address the worrisome foreign exchange rate, dimension of inflation, and deficit financing. He said there is a need to have a stable exchange rate if Nigeria must be prosperous, adding that the measures will include economic diversification and operations such as ensuring rules that are open and transparent for foreign direct investment.

“There are two very important issues that we would have to address. It is an operational issue. Right now, you have a situation about the figures. We are aware of unsettled obligations by the CBN. The immediate priority is to verify the authenticity and extent of what it holds; once we do that we need to promptly find a way to take care of that.

“It will be naive for us to expect that we will be making too much progress if we are not able to handle that side of the foreign exchange market. We cannot reasonably expect serious foreign direct investors or portfolio investors and now we are talking about short-term term in place. We cannot expect that those players who generally have an impact on our market will do so if we do not have an open and transparent system that everybody understands and can rely on, not subject to review without any notice,” he said.

The new CBN Governor and former chairman of Citibank Nigeria is a distinguished leader in the financial and development sectors with over 30 years of experience in private, public, and not-for-profit organisations. With diverse corporate governance experience, Cardoso has also sat on the boards of Nigerian subsidiaries of Texaco and Chevron and chaired the board of EFInA, a financial sector development organisation supported by the Bill and Melinda Gates Foundation.

He served in government as the first Commissioner for Economic Planning and Budget for Lagos State, where he championed the financial reform process thatW led to the state’s development of independent tax revenues.

Cardoso introduced significant reforms during his tenure that improved the state’s financial autonomy and tax revenue generation. His visionary leadership paved the way for economic growth and transformation in Lagos. He also spearheaded initiatives such as the Medium-Term Expenditure Framework (MTEF), Security Trust Fund, and Public-Private Partnerships (PPP).