Nigeria: CBN Warns Against Return to Intervention Policies Amid Push for Stability

Governor of the Central Bank of Nigeria, Olayemi Cardoso, has cautioned against renewed calls for the apex bank to return to large-scale intervention programmes, warning that such measures previously weakened monetary policy effectiveness and distorted the institution’s financial position.

Cardoso said the progress made in restoring confidence and credibility to the Central Bank of Nigeria over the past two and a half years was largely driven by a shift toward orthodox monetary policy tools, rather than non-conventional interventions.

According to him, the apex bank will continue prioritising transparency, evidence-based policymaking, and institutional reforms aimed at delivering sustainable macroeconomic stability.

The governor spoke as the CBN released findings from its latest Household Expectations Survey, which projected that the Consumer Confidence Index could rise to 10.7 points over the next six months, signalling improving optimism among households about economic conditions.

The survey, conducted by the CBN’s Statistics Department, showed that expectations of improved family income, stronger economic performance, and better household finances are expected to drive sentiment.

“Consumer confidence suggests an optimistic outlook for the next three to six months. Over the next three months, consumer confidence is expected to rebound with an index of 3.3 points. This optimism is driven by anticipated positive sentiments in household income and economic condition,” the report stated.

In a statement issued by the apex bank, Cardoso said the institution had made significant progress in strengthening internal processes, improving coordination, and ensuring policy decisions are increasingly guided by technical analysis and structured deliberation.

He noted that the CBN has also improved communication with financial markets, investors, businesses, and the public, making policy signals clearer and more predictable.

According to him, these reforms form part of the bank’s broader transition toward an inflation-targeting framework that places stronger emphasis on price stability.

Cardoso said the transition would require deeper institutional reforms, stronger coordination among economic institutions, and sustained technical efforts to ensure long-term effectiveness.

He commended Deputy Governors, members of the Monetary Policy Committee (MPC), directors, and stakeholders for their resilience during what he described as a difficult but necessary reform process.

Reflecting on the state of the institution at the start of the current administration, Cardoso said the CBN faced weakened autonomy, declining confidence in monetary policy, and heavy dependence on intervention programmes that blurred the line between fiscal and monetary responsibilities.

He added that inefficiencies and opacity in the foreign exchange market, combined with weak coordination between fiscal and monetary authorities, had reduced policy effectiveness and contributed to inflationary pressures, exchange rate instability, and falling investor confidence.

However, he noted that reforms introduced under the current leadership have started yielding positive results.

Speaking during the opening of the MPC workshop themed “Strengthening Monetary Policy Effectiveness Towards Sustainable Macroeconomic Stability,” Cardoso said the bank has restored a more orthodox monetary policy framework, with stronger reliance on traditional monetary tools and the Monetary Policy Rate as the key signal for inflation management and economic expectations.

He added that improvements in liquidity management, policy communication, and forward guidance have enhanced transparency and improved public understanding of monetary policy direction.

While acknowledging that inflation remains elevated and requires close monitoring, Cardoso said there are early indications of moderation, alongside improving stability in the foreign exchange market.

He also stated that greater transparency in forex market operations has improved price discovery, reduced volatility, and gradually restored confidence among businesses and investors.

According to the governor, ongoing reforms and stronger policy coordination have also improved Nigeria’s ability to absorb external shocks, including disruptions arising from geopolitical tensions in the Middle East.

Cardoso further described the recently concluded banking recapitalisation programme as evidence of successful stakeholder engagement and effective policy coordination by the CBN’s financial sector supervision teams.

The Household Expectations Survey also showed that consumer sentiment around the prices of key household expenses—including telecommunications, food, education, healthcare, and entertainment—remains elevated, with an index of 36.1 points recorded in April 2026.

However, respondents expect prices of these essentials to moderate over the next three to six months.

The report noted that food continues to account for the highest share of expected household spending, followed by transportation, education, and other household goods.

At the same time, households remain cautious about making major purchases such as homes, vehicles, investments, appliances, and rent commitments, with negative sentiment recorded across these categories.

“In April, the buying conditions index stood at 24.8 points for consumer durables, 24.7 points for motor vehicles, and 24.3 points for buildings and landed properties, suggesting that respondents generally view current conditions as unfavourable for making these purchases,” the report stated.

The survey also showed that about 66.7 per cent of households believe a further increase in inflation would negatively affect the Nigerian economy.

Also speaking at the MPC workshop, Deputy Governor for Economic Policy at the Central Bank of Nigeria, Muhammad Sani Abdullahi, said the gathering was organised to encourage technical dialogue and knowledge sharing at a time when monetary policy decisions are increasingly shaped by global uncertainties and domestic economic shifts.

He added that the workshop reflects the apex bank’s commitment to strengthening policy formulation and implementation to support macroeconomic stability.