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No single number explains Nigeria’s economic collapse in the last eight years better than one: N26.95 trillion.
That was the size of the Ways and Means Advances the Central Bank of Nigeria had extended to the Federal Government as of May 2023. It was not just a number. It was a monster. And it almost ruined Nigeria.
To understand what Olayemi Cardoso did, you must first understand what Ways and Means was meant to be, and what it became.
Under Section 38 of the CBN Act 2007, the CBN can grant temporary advances to the Federal Government to cover short-term shortfalls in budget revenue. The law is explicit: it must be repaid within the same financial year, and it must not exceed 5% of the previous year’s actual revenue. It is an overdraft, not a lifestyle.
What happened between 2015 and 2023 was a complete bastardization of that law. The CBN stopped being a central bank and became the overdraft machine of the treasury. Year after year, it printed money to fund fuel subsidy, to fund salaries, to fund deficits that were never repaid. By 2023, that overdraft was not 5% of revenue. It was more than 200% of revenue. It was over 30 times larger than the legal limit.
The economic consequence was simple and brutal. When you print N27 trillion without producing anything, you create too much naira chasing too few goods. You devalue every naira in the pocket of every Nigerian. That is why inflation rose from 9% in 2015 to 26.72% by September 2023 and would later peak at 34.8%. That is why the naira, which was N197 to a dollar in 2015, was trading at over N750 at the official window. The CBN was not fighting inflation; it was funding inflation.
It was a silent tax on the poor. The market woman did not know what Ways and Means was, but she felt it when a bag of rice moved from N8,000 to N70,000. The salary earner did not read the CBN Act, but he felt it when his N100,000 salary could no longer take him home.
Worse, it destroyed monetary policy itself. How can you raise interest rates to mop up liquidity when you are simultaneously printing trillions to inject it? The CBN was pressing the brake and accelerator at the same time. The car was bound to crash.
Enter Cardoso in September 2023.
What he did was not complicated in theory, but it required extraordinary courage in practice. He stopped the machine.
First, he drew a hard legal and moral line. In his first Monetary Policy Committee meeting, he made it clear: no new Ways and Means. Not one kobo of new printing to fund government deficits. The CBN would return to orthodoxy. If government wants to spend, it must earn, or it must borrow transparently from the market via bonds and treasury bills at market rates, not from the CBN’s vault at zero cost.
Second, he forced transparency on the stock. Rather than hiding the mountain of debt, his administration collaborated with the Federal Government and the National Assembly to securitize the existing stock and bring it to the light. More importantly, he began to reduce it. Through repayments, reconciliation, and a refusal to roll over reckless advances, the Ways and Means balance has fallen from N26.95 trillion in May 2023 to N2.84 trillion by January 2026.
Think about that reduction. Over N24 trillion of toxic, inflationary money has been pulled out of the system. That is roughly $15 billion of excess liquidity that is no longer suffocating the economy.
Third, he restored the transmission mechanism. Once you stop printing, monetary policy begins to work again. That is why his interest rate hikes, painful as they were at 27.5%, actually had bite. He was mopping up a pool that was no longer being refilled by the back door. Without ending Ways and Means, those rate hikes would have been futile.
The results are now in our faces.
Inflation is down from 34.8% to 15.39% as of August 2026. The naira has stabilized because the supply of naira is no longer infinite. External reserves have rebuilt to $55.25 billion because we are no longer monetizing deficits that scare investors away. The World Bank and IMF, which for years flagged Nigeria’s Ways and Means as a textbook case of fiscal dominance, have now praised the return to discipline.
What Cardoso curbed was not just an accounting entry. He curbed a culture.
He curbed the culture of impunity where the CBN Act could be violated with no consequence. He curbed the culture of fiscal laziness where it was easier to call the CBN Governor than to widen the tax base. He curbed the culture of economic illiteracy that believed you could print your way to prosperity.
For the future, the lesson must be codified. The National Assembly must amend the CBN Act to make violations of Section 38 a punishable offence. The 5% limit must be enforced by real-time publication. The CBN must never again be allowed to be the government’s ATM.
Cardoso has shown that the monster can be tamed. He did not use magic. He used the law, he used discipline, and he used the courage to say no.
Nigeria almost died from printed money. Today, because one man refused to keep printing, Nigeria has a chance to live on earned money.
How CBN Under Cardoso’s Watch Curbed the Ways and Means Monster That Almost Ruined Nigeria By Clem Aguiyi
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