CBN Governor Cardoso Blames Nigeria’s Inflation on N27trn, N10trn Borrowing by Previous Administration

Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has posited that Nigeria’s current economic challenges, including rising inflation and high interest rates, stem from the past administration’s extensive borrowing.

He pointed to the N27 trillion Ways and Means advances and N10 trillion interventions as major contributors to these issues.

Speaking at a CEO Forum in Lagos on Thursday, Cardoso explained that the nation’s high interest rate of 26.25 percent as of May is largely due to the increased money supply, which in turn fuels inflation. This scenario forces the Monetary Policy Committee (MPC) to maintain high rates to curb inflation.

Cardoso emphasized that the MPC’s decisions are based on data trends and are aimed at reducing inflation, not influenced by individual sentiments.

He clarified that the interest rates are determined by the MPC, composed of independent members driven by economic data.

“The interest rate is not set by the governor of the Central Bank. It is set by the members of the monetary policy committee,” Cardoso stated.

“Thankfully, we have a committee of independent-minded people who are solely driven by data. The MPC has made it very clear that their major issue is taming inflation, and they will do whatever is necessary to achieve this.”

Cardoso noted that the surge in money supply due to the N27 trillion Ways and Means advances and N10.5 trillion interventions has significant consequences, which the country is now facing.

Under the former CBN Governor, Godwin Emefiele, Nigeria’s borrowing from the apex bank had escalated to N27 trillion.

The Debt Management Office recently attributed the increase in Nigeria’s debt to N121 trillion by the end of the first quarter of 2024 to the N4.90 trillion Ways and Means loan and foreign exchange differences.

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