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Cardoso Projects Steady Economic Growth, Improved Foreign Reserves In 2024

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The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has projected that Nigeria’s economy will grow by 3.2% in 2024 and 3.3% in 2025, with a robust growth rate of 4.3% anticipated in the long term.

Cardoso made these remarks while addressing the House of Representatives Committee on Banking, outlining the CBN’s policy measures and strategies to tackle domestic macroeconomic challenges.

Cardoso emphasized that the non-oil sector continues to be a strong performer, contributing 94.30% to Nigeria’s GDP and maintaining a steady 2.80% growth rate.

The oil sector has also shown remarkable recovery, with growth increasing to 10.15% in the second quarter of 2024, compared to 5.70% in the first quarter, largely due to enhanced security measures that boosted crude oil and natural gas production.

He highlighted the strong performance of the services sector, which remains the primary driver of the economy, contributing 58.76% to GDP with a growth rate of 3.79%.

The industrial sector has also seen significant improvement, with its growth rate surging to 3.53% from 0.31%. The agricultural sector’s contribution to GDP increased, with growth rising to 1.41% from a previous contraction of -0.90%, signaling a positive shift in productivity.

Cardoso also noted a substantial improvement in Nigeria’s foreign exchange reserves, which grew by 12.74% to $39.12 billion by October 2024, driven by foreign capital inflows and receipts from crude oil-related taxes. Remittance flows now represent 9.4% of total external reserves. The current account surplus and trade balance also showed significant improvements during the second quarter of 2024.

On inflation, Cardoso reported a gradual deceleration from 34.19% in June 2024 to 32.15% by August 2024, attributing the trend to aggressive monetary policy measures. He stated that inflation is expected to decline further in the near-to-medium term as the CBN continues to tighten policy rates and coordinate effectively with fiscal authorities.

To combat inflation, the CBN has raised the policy rate by 850 basis points to 27.25%, increased the Cash Reserve Ratio, and normalized Open Market Operations as the primary liquidity management tool. The Bank has also adopted an Inflation-Targeting (IT) framework to stabilize prices and improve liquidity management.

Cardoso also spoke on the banking sector, highlighting the CBN’s recapitalization efforts aimed at raising the capital base of banks to support Nigeria’s goal of becoming a $1 trillion economy by 2030. He pointed out that banks must meet new capital thresholds by March 2026, with options such as mergers, acquisitions, and the issuance of new equities available.

In conclusion, Cardoso expressed optimism about Nigeria’s economic outlook, emphasizing that the country is well-positioned for continued growth in the non-oil, oil, and industrial sectors. He assured that despite global economic uncertainties and domestic challenges, the CBN’s reforms are yielding positive results, with improvements in investor confidence, capital inflows, and overall financial system stability.


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