Email: totalpolitics@ymail.com
Tel: 08034747898
By the time this opinion is published, the 2025 Christmas celebration will have come and gone, with millions of Nigerians not knowing it was Christmas due to economic hardships and social uncertainty. Whatever the case may be, I wish to extend a warm Christmas greeting to our loyal readers and fans, and a prosperous new year.
In this episode, I will review the different CBN monetary policy interventions in 2025, how the policies fared in the year ending, and project into the future. Like yesterday, the past year is gone. what matters now is the future. What are the policies to expect in 2026?
Nigeria’s collective cynicism toward monetary policy is not accidental; it is the bitter harvest of years of institutional abuse. For far too long, successive governments deliberately appointed kleptomaniacs into sensitive positions at the Central Bank of Nigeria (CBN), turning what should have been a bastion of macroeconomic stability into a theatre of mindless looting. The outcomes were legendary in their destructiveness—currency debasement, regulatory capture, insider trading, and a steady erosion of public confidence. Consequently, even when genuine people now attempt genuine reforms, many Nigerians respond with folded arms and cynical smirks; we rage and resist reforms before even learning the details. We have fallen into the trap of judging policies not by their substance, but by the ugly antecedents of those who once misused the system, sometimes even judging by ethnicity or personal identity rather than by the weight of character and competence.
Yet history must not become a permanent prison. Without mincing words, the present CBN administration under the watch of Yemi Cardoso as Governor, against enormous odds, has shown not only presence in confronting a deeply damaged monetary system but also capacity in shaping and enforcing coherent monetary policy. The events of 2025 marked a decisive departure from cosmetic reforms of the past. This time, there was a willingness to absorb political heat to restore credibility, discipline, and long-term stability to Nigeria’s monetary framework.
What distinguishes the current CBN governance is not merely technocratic elegance, but grounded realism. The leadership has demonstrated a rare willingness to walk the streets, listen to specialised financial institutions, engage market operators, and pay attention to the lived experiences of ordinary Nigerians. This intelligence has been translated—sometimes imperfectly, but deliberately—into strategies aimed at palliating real-life economic pressures. Monetary policy in 2025 was no longer crafted solely for boardrooms and policy journals; it was framed with a consciousness of market stalls, transport fares, rent, school fees, and survival-level entrepreneurship.
At the heart of the 2025 monetary stance were the clear pillars of the Monetary Policy Committee (MPC). The first was aggressive tightening of interest rates. With the Monetary Policy Rate (MPR) around 27 percent and reinforced by a Cash Reserve Ratio (CRR) of 50 percent for Deposit Money Banks and 16 percent for Merchant Banks, the CBN sent an unequivocal signal that inflation would no longer be tolerated as a casual inconvenience. Excess liquidity, which had fuelled speculative behaviour and price instability, was deliberately squeezed. The CBN upheld the policy even when it appeared unpopular to some stakeholders.
The second pillar was the recapitalisation of banks and other financial institutions. This policy recognized a painful truth: a weak banking system cannot support a strong economy. Years of undercapitalisation, regulatory arbitrage, and complacency had left parts of the financial sector vulnerable. By insisting on stronger capital buffers, the CBN aimed to build institutions capable of funding long-term growth, absorbing shocks, and restoring depositor confidence.
The third pillar was strict control and reform of foreign exchange distribution. The forex market had long been a feeding trough for rent-seekers, with multiple windows, opaque allocations, and insider advantages. In 2025, the CBN pursued reforms to unify rates, reduce arbitrage, and improve reserve transparency. While these measures initially caused discomfort, they were essential for restoring credibility to the naira and reducing speculative attacks on the currency.
The gains of the 2025 MPC, though still evolving, are tangible. Inflation, while not yet at comfortable levels, showed signs of moderation as monetary excesses were curtailed. The Naira experienced relative stabilisation compared to the extreme volatility of previous years, aided by improved forex management and tighter controls. Financial system stability improved as recapitalisation efforts reassured both local and foreign investors. These outcomes matter deeply because monetary policy directly affects inflation, which erodes purchasing power; interest rates, which determine borrowing costs; the value of the naira, which shapes import prices and travel; and economic growth, which underpins job creation and business survival.
Importantly, staying informed about these policies empowers Nigerians to make better financial decisions—adjusting spending, savings, and investments—and to anticipate market changes rather than being perpetually blindsided by them. Monetary policy is not an abstract exercise; it shapes daily life.
However, honesty demands that we acknowledge what went wrong and where gaps remain. The most significant weakness of the 2025 framework was the transmission mechanism. High interest rates, though effective against inflation, constrained access to credit for small and medium-scale enterprises already struggling with high energy costs and insecurity. Monetary tightening alone could not fix structural deficiencies in logistics, power supply, and productivity. Additionally, CBN communication has not always effectively reached everyday Nigerians. Policy language often remained technical, leaving room for misinformation and deliberate distortion by hostile commentators. In communication , words and language matter and that includes methods and strategy of delivery.
This brings us to another corrosive force in Nigeria’s public life: the rise of paid activists and professional outrage merchants. Masquerading as civil society crusaders, many have turned propaganda into an evangelical enterprise, demarketing every aspect of government action. Their metier is the trade in monetised outrage. They perpetually point at imagined enemies, manufacture anxieties, and frame every reform as oppression. In doing so, they demoralise citizens and sabotage national cohesion.
Worse still, many of these loud voices are themselves beneficiaries of the very insider trading and sabotage that crippled Nigeria’s institutions in the past. When exposed, they rebrand as whistle-blowers, weaponizing selective morality to mask selfish interests. The result is a toxic environment where even well-intentioned reforms are drowned in noise, suspicion, and manufactured scandal. One may argue, therefore, that while hydra-headed corruption exists—and a corrupt political class remains a real threat to our collective survival—our politicians are not always as monstrously corrupt as we exaggerate. They are also victims of an uncultured culture of labelling and an uncooperative citizenry that often seems predisposed to hating its own country.
Looking forward to 2026, expectations must be sober but hopeful. If fiscal discipline is sustained to match with monetary policies, inflation should continue its downward trajectory, allowing for a gradual easing of interest rates to support productive growth. Forex stability, if consolidated, can reduce import costs and restore investor confidence. Improved policy coordination between the CBN and fiscal authorities will be crucial to ensure that monetary gains translate into real improvements in living standards.
Equally important will be better communication and civic education. Monetary policy must be explained in plain language, enabling citizens to see how abstract decisions affect their daily lives. If Nigerians can look beyond propaganda and judge policies by outcomes rather than inherited prejudices, 2026 could mark the turning point where monetary stability finally delivers qualitative life improvements for ordinary citizens.
In the end, the story of 2025 is one of cautious progress under difficult circumstances. The promise of 2026 lies in consolidation, patience, and collective responsibility—by government, institutions, and citizens alike.
How CBN’s Monetary Policies Fared in 2025 and What to Expect in 2026 By Clem Aguiyi
Leave a Reply