CBN Governor: Nigeria's Crisis Made Us Think Outside the Box

Olayemi Cardoso, the governor of the Central Bank of Nigeria, said on Thursday that Nigeria's current fiscal crisis has pushed the monetary and fiscal authorities to find new ways to generate revenue and stabilize the economy.

Mr. Cardoso shared his thoughts during a high-level panel discussion titled "Debate on the Global Economy: Forging Resilient and Dynamic Economies for the Future". This event took place alongside the World Bank and IMF meetings in Bangkok, Thailand.

The panel was hosted by Lisa Abramowicz, who co-hosts "Bloomberg Surveillance". The discussion focused on how countries can create strong and adaptable economies in a world that is becoming more divided and uneven.

During the panel, Mr. Cardoso highlighted that when the new administration took office, the fiscal situation in Nigeria demanded that policymakers think creatively to find solutions. "When you are going through a crisis, it forces you to be creative," he said.

According to recent reports from the Central Bank of Nigeria, Nigeria's gross external reserves are at $55.1 billion, while net foreign reserves are around $46 billion. This comes amid a period of relative stability in the foreign exchange market.

Mr. Cardoso explained that the government took over a situation where external reserves had fallen to about $3 billion and the country owed around $7 billion in various obligations. He noted that orthodox monetary policies helped to manage the debt and stabilize the economy.

He also pointed out that relying solely on oil revenue is not a lasting solution. "We had to be creative as to how we diversify," he said. The Central Bank started looking at diaspora and international remittances to clear obstacles and improve capital flow.

Mr. Cardoso mentioned that the CBN adopted new methods and moved away from unsustainable practices. This was part of the needed changes to create real value in the economy. "It seemed impossible to everybody and people laughed," he said, referring to the skepticism faced by CBN leadership. He added that the decisions made have proven to be beneficial.

The Central Bank Governor also noted that the country is now focusing on adding value to its resources. He referenced the Dangote Refinery and its potential role in boosting growth and foreign exchange stability.