Nigeria’s fiscal crisis forced us to be creative, look beyond oil revenues – Cardoso

Olayemi Cardoso, the governor of the Central Bank of Nigeria, said on Thursday that Nigeria’s fiscal crisis forced the monetary and fiscal authorities to be creative in revenue generation and stabilisation efforts.

Mr Cardoso spoke on Thursday while featuring on a high-level panel themed “Debate on the Global Economy: Forging Resilient and Dynamic Economies for the Future”, held on the sidelines of the World Bank/IMF meetings in Bangkok, Thailand.

Moderated by Lisa Abramowicz, co-host of “Bloomberg Surveillance”, the debate was put together to explore how countries can build resilient and dynamic economies in an increasingly fragmented and uneven global landscape, using resilience as the common thread across the three segments.

Speaking on the panel, Mr Cardoso said the fiscal reality of the Nigerian state when the new administration came into power forced policy makers to be creative in their solution ideas.

“When you are going through a crisis, it forces you to be creative,” Mr Cardoso said.

Nigeria’s gross external reserves stand at $55.1 billion, with net foreign reserves at about $46 billion, according to recent updates from the Central Bank of Nigeria, amid relative stability in the foreign exchange market.

The CBN governor explained that the government inherited a situation where external reserves dropped to about $3 billion and the nation was owing about $7 billion in sundry obligations.

The orthodox monetary policy helped to pay the debt and stabilise the economy, Mr Cardoso said, adding that it was clear to the CBN that reliance on oil revenue was not a sustainable model.

“We had to be creative as to how we diversify,” he said, adding that the apex bank looked at the diaspora and international remittances to remove all the bottlenecks and ease capital flow.

Mr Cardoso said the CBN embraced how to do things differently, and changed from ways that were not sustainable, as part of measures needed to create value.

“It seemed impossible to everybody and people laughed,” he said of the degree of scepticism the CBN leadership faced, adding that the policy decisions paid off.

The Central Bank Governor added that the nation is now looking in the direction of value addition, while making reference to the Dangote Refinery and its potential contributions to growth and foreign exchange stability.

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Participants looked at how economies, firms, and institutions can preserve stability and withstand recurrent shocks despite more limited policy space, how they can sustain balanced growth amid widening global divergences, and how they can harness AI, innovation, and productivity-enhancing reforms to expand opportunity and growth.

The debate featured Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), Kyriakos Pierrakakis, the Minister of Economy and Finance of the Hellenic Republic, and other experts.