Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has ruled out any possibility of returning the apex bank to the era of fiscal deficit financing.
Cardoso made the declaration at the 60th Annual Bankers’ Dinner held in Lagos, attended by top bankers, political leaders and regulators.
Fiscal deficit financing allows the Federal Government to rely on the CBN for liquidity support to cover budget shortfalls, under strict statutory conditions.
However, under the previous administration, the government reportedly drew an accumulated N30 trillion in controversial overdrafts from the CBN to fund deficits, with about N23 trillion later restructured into a long-term bond.
CardosoCardoso, who had previously stated that the CBN had ended the era of “reckless” ways and means, reaffirmed that the bank will not return to “funding fiscal deficits,” even though such provisions exist under the CBN Act.
He also reiterated the Bank’s commitment to achieving single-digit inflation, saying double-digit inflation “cannot be accepted.”
Cardoso noted that headline inflation has fallen sharply from over 34 per cent in November last year. As of last month, the rate stood at 16.05 per cent, the lowest in recent years, following a change in the base year and restructuring of the Consumer Price Index (CPI) basket.
Despite this significant moderation, he stressed that the CBN will continue to push inflation down to single digits. The last time Nigeria recorded single-digit inflation was in 2025.
Looking ahead, Cardoso disclosed that the CBN’s internal models project sustained disinflation into 2026. He also said the Bank remains committed to the “organic” growth of Nigeria’s external reserves, which rose to over $46 billion in mid-November.
The governor said recent reforms have placed the economy on the right path, allowing for steady and sustainable growth. These reforms, he added, required courage, patience and sacrifice — qualities he said the current administration has demonstrated.
“The resilience and recovery we are seeing is not a coincidence but a product of difficult choices,” he told the gathering.
President/Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Prof. Pius Olanrewaju, said 2025 reflects a story of resilience, stabilisation and gradual recovery.
He noted that the institute remains committed to developing human capital within the sector and has introduced a talent retention programme to mitigate the impact of the ‘japa’ phenomenon.
Chairman of the Body of Bank CEOs, Oliver Alawuba, emphasised that increased credit to the private sector is necessary to consolidate ongoing economic recovery.
A stronger risk-management framework, he said, would enable banks to expand credit to growth-driving segments such as SMEs, youth, women and the creative sector.
Alawuba, who is also the Group Managing Director of UBA, assured that banks are fully mobilised to ensure cash availability ahead of Christmas and are committed to seamless digital transactions during the festive season.
