Governor Olayemi Cardoso of the Central Bank of Nigeria (CBN) has expressed optimism about the nation’s economic future, projecting that Nigeria could achieve a $1 trillion economy by 2030.
This announcement was made during a presentation to the Senate Committee on Banking, Insurance, and Other Financial Institutions in Abuja, where Cardoso provided a comprehensive review of the CBN's activities for the first half of 2024.
Since taking office in October 2023, Cardoso has focused on stabilizing the economy, rebuilding confidence in financial markets, and laying the groundwork for sustainable growth. He reported a GDP growth rate of 2.98% in the first quarter of 2024, an increase from 2.31% in the same period the previous year.
The services sector emerged as the primary driver of this growth, contributing 58.04% to the GDP with a growth rate of 4.32%, while the industrial sector also showed signs of improvement, achieving a growth rate of 2.19%.
Despite ongoing inflationary pressures, which saw headline inflation rise from 29.90% in January to 34.19% in June 2024, Cardoso noted that the rate of monthly increases has begun to be moderate, indicating the effectiveness of the CBN's anti-inflation measures.
He highlighted a significant narrowing of the spread between official and Bureau de Change (BDC) rates, which decreased from N162.62 in January to N47.22 in June, a sign of improved market efficiency.
As of July 16, 2024, Nigeria's external reserves stood at $36.89 billion, up from $33.22 billion at the end of December 2023. This level of reserves is sufficient to cover over 11 months of imports of goods and services, significantly exceeding the international benchmark of three months, thereby providing a robust buffer against external shocks.
Cardoso also discussed the resilience of the banking sector, which consists of 26 commercial banks, six merchant banks, and four non-interest banks. Key indicators such as capital adequacy and liquidity have shown notable improvements, reinforcing the sector's stability.
In his remarks, Cardoso outlined the CBN's proactive measures to combat inflation, including raising the policy rate by 750 basis points to 26.25%, increasing cash reserve ratios, and adopting an inflation-targeting framework.
