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By Chinwendu Obienyi
Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, has cautioned that the global economy remains vulnerable despite signs of recovery, warning that rising protectionist policies and renewed trade tensions could weigh on growth prospects in the months ahead.
Speaking at the just-concluded Monetary Policy Committee (MPC) meeting held in Abuja, Cardoso noted that global output is expected to strengthen in the near to medium term, supported by improved trade negotiations, accommodative monetary policy in advanced economies, and easing geopolitical tensions. These factors, he said, are helping to restore momentum after years of disruption.
However, he stressed that the positive outlook is tempered by emerging risks. “Protectionist policies, geo-economic fragmentation, and the potential resurgence of trade tensions between the United States and its major trading partners continue to pose significant threats to the global economy,” Cardoso said.
He added that while global inflation is projected to continue its downward trend through 2026, driven by earlier monetary tightening, stabilising supply chains and softening commodity prices, price levels are still expected to remain above pre-pandemic benchmarks in the near term.
On the domestic front, Cardoso said Nigeria’s inflation outlook is improving.
“The MPC anticipates a sustained disinflation trajectory, largely supported by the lagged effects of previous monetary policy tightening and continued stability in the foreign exchange market. The ongoing seasonal harvest cycle is also expected to increase food supply and ease pressures on food prices”, he said.
Cardoso reiterated the MPC’s commitment to evidence-based policymaking, emphasising that the bank remains focused on maintaining price stability and safeguarding the financial system amid evolving global and domestic conditions.
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Nigeria’s macro-economic environment has improved significantly over the past year, with Cardoso noting that inflation has fallen sharply and market stability is returning after a prolonged period of volatility.
“Happily, the macro-economy is looking a lot better and inflation has come down steadily,” he said. “To my mind, this is the core of the matter, stability. To the extent that we have accomplished stability, it is a fundamental process in the road to growth.”
Cardoso recalled that roughly two years ago, financial markets were marked by severe instability, which discouraged both local and foreign investors. The turnaround, he explained, is beginning to change investor sentiment.
“When there is instability, those who would normally invest stay away. Now we have moved to a situation where there is stability, and after stability comes investment and after investment comes growth,” he said.
According to him, early signs of economic expansion are already emerging, with recent quarterly data showing improvement. Cardoso added that sustained stability would give investors the confidence needed to commit long-term capital, including those concerned about repatriating funds.
“The fact that we are now accomplishing stability gives greater confidence to investors who ultimately want to invest,” he said. “I am almost certain that, in time, Nigerians will begin to reap the gains of macro-stability. Stability and enduring growth are what we really need, not short-term growth that cannot be sustained.”
Cardoso reiterated that the CBN’s priority remains building a stable macroeconomic environment capable of attracting investment and supporting durable economic growth.
