Michael Olayemi Cardoso yesterday began his tenure as the 12th Central Bank of Nigeria (CBN) governor following his clearance for the position by the Senate.
He promised to provide transparent and focused leadership with full adherence to the rules and return the apex bank to its core monetary policy responsibility.
He also pledged to work in synergy with the fiscal authorities in the overall interest of the economy in the short and medium term.
Cardoso, 66, a former chairman of Citi Bank, was Lagos State Commissioner for Budget and Economic Planning.
He spoke during his screening alongside the four deputy governors by the Senate. All of them were cleared.
The deputy governors are: Mrs. Emem Usoro, Mr. Muhammad Sani Abdullahi Dattijo, Mr. Philip Ikeazor and Dr. Bala M. Bello.
The deputy governors also responded to some of the questions posed by senators, including Senate President Godswill Akpabio.
All the nominees left the senators in no doubt about their capacity and capability.
Cardoso said for 12 years, between 2010 and 2022 he had the privilege of serving as the chairman of Citi Bank where: “I dedicated myself to enhancing both the financial and non-financial operations of the institution.’’
He told the Senate that the issue of exchange rate of the Naira to other currencies was worrisome.
“For the type of economy that we want, we need to have an exchange rate that is stable and we must apply short and medium term measures to achieve this,’’ he said.
Cardoso added that CBN’s new management team would evolve rules that were open and transparent and comprehensible by all players in the finance business.
“We cannot expect serious foreign investors and portfolio investors who have an impact on the market to do so if we do not have a transparent system that everybody understands and can rely on,’’ he said.
On inflation, he said: “There is the need to significantly revamp the infrastructure at the central bank with respect to data and to ensure that our data gathering capacity is significantly enhanced.
“This is necessary so that we can make decisions based on stellar data. This is crucial in measuring inflation,’’ he stressed.
He added that reliable studies showed that in the past 10 years to 15 years, at least 50 per cent of inflation resulted from money supply and deficit financing.
“This is a big problem; at least it certainly has been over a period of time and it is something we have to face frontally.
“You have been hearing a lot of complaints. There are various measures to be taken and some of them are already being taken like the removal of fuel subsidy and fast-tracking the collection of taxes,” he said.
Cardoso added: “In refocusing CBN to its core mandate, there is need to pull the CBN back from direct development, finance interventions into more limited advisory roles that support economic growth. These advisory roles would include, for instance, one, act as a catalyst in propagation of specialized institutions and financial products that support emerging sectors of the economy, facilitate new regulatory frameworks to unlock enormous capital, accelerate access to consumer credit, and expand financial inclusions to the masses.”
He assured the Senate that the CBN under his watch will not be hijacked or used by politicians.
He said: “This is a position of great trust and with that it comes with huge responsibility to meet up that trust …and my idea is to do what is right and how it is right. We have seen the effect of not doing what is right and we do not intend to go that route.
“Secondly, on the issue of not obeying the hallowed chambers’ summons for conversation, frankly, I have absolute no doubt that that has got to be part of the engagements that I spoke about earlier.
“Part of that is that the law specifies that such dialogue should take place twice in a year and as I said in resetting the Central Bank, we must ensure that we do not run foul of the law.
“It goes back to the issue of culture of compliance. We are going to ensure we maintain a culture of compliance in the CBN. There will be zero tolerance for non-complying with orders and I can assure you that that tone would be fully set from the top.”
He added: “What is important to us is the element of economic growth. Our feeling is that in identifying the important issues with economic growth, we believe very strongly that size matters.
“The economic policy proposal of the administration has identified a set of fiscal reforms and growth patterns that will achieve $1trillion GDP within eight years.
“In reviewing selected growth targets that can achieve $1trn GDP, selected countries with large population and similar characteristics as Nigeria, it is interesting to identify micro-economics indicies that points to Nigeria’s economic trajectory, being faithful to implementation of the proposed economic reforms.
“In economies bigger than $1trillion, these indices include moderate inflation, sizeable foreign reserves and capacity to creating rebound from economic downturns.
“In other words, to the extent that the administration has defined such a bold target for the country, it is our feeling that achieving this is very critical to achieve the stability that we require in various economic indices.
“It is not the only thing, but it is very important. So we believe that this is the right way to go.
He insisted that the immediate issues his team would address at the CBN include both Operational and Systems.
He added: “It is what I will term uncorrelalational issues. We are aware that there are unsettled obligations by the CBN. Whether it is $4b, $5b or $7b I don’t know but definitely the immediate priority is to ascertain the extent.
“We need to find a way to take care of that. It will be naive for us to be expecting to succeed if we are not able to handle that side of the foreign exchange market.
According to him, the medium term measures in reviving the economy “have to do with balance of payments over a period of time like the sort of things that are being done already with respect to ensuring that we are getting more from petroleum resources with the removal of fuel subsidy and diversifying the economic base of the country.
“That I believe will continue by the present administration and of course it will take time. I think we should take that as a medium term measure than the immediate.”
Many financial experts rated the appearance of the CBN governor and his deputies high, especially their pledge to return the apex bank to its core responsibilities.