•Says inflation could have reached 42.81% by Dec. 2024 without CBN interventions, disinflation within reach, Bagudu hails synergy between fiscal, monetary authorities
•Adedeji: FIRS generated historic N21.6tn in 2024, eyes N25.2tn in 2025
•Sets key deliverables for departments, says era of unproductiveness over
CHIGOZIE AMADI
The Governor of Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, yesterday said despite Naira’s volatility in recent years, the international community believed the currency is now reflective of its real rate and currently more competitive.
The CBN governor also said recent reforms in the nation’s Foreign Exchange (FX) segment have continued to attract foreign investors into the economy, vowing that the monetary authority will do everything possible to ensure that current inflows continue.
Speaking at the 2025 Monetary Policy Forum with the theme, “Managing the Disinflation Process” in Abuja, the CBN governor noted that foreign investors would always be willing to invest in an environment where returns are attractive.
This came on a day the Executive Chairman, Federal Inland Revenue Service (FIRS), Dr. Zaccheus Adedeji, disclosed that the service generated a record N21.6 trillion revenues in 2024, surpassing its N19.4 trillion target by 111.6 per cent.
Speaking at the opening of the service’s 2025 Management Retreat in Abuja, he said the achievement was no mean feat, attributing the performance to the resilience, professionalism, and dedication of staff, as well as the “visionary leadership and a strategic focus on the pillars of people, technology, and processes”.
Adedeji said non-oil taxes exceeded targets by 28 per cent and contributed 73.4 per cent of total revenue, adding that the result will “forever be recorded in the history” of the service.
Meanwhile, the federal government has set a revenue target of N25.2 trillion for the FIRS in 2025.
Cardoso however, noted that cautious optimism was emerging globally around potential improvements in capital flows to emerging markets, as advanced economies transition toward monetary easing.
Also speaking at the forum, the Minister of Budget and Economic Planning, Senator Abubakar Bagudu, commended the cooperation between the fiscal and monetary policy authorities, saying it is in the best interest of the country’s economy.
The minister said the collaboration had been aided by the wealth of experience of its drivers, including the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, and the CBN governor, who worked with President Bola Tinubu in the past.
He further acknowledged the possible divergence between fiscal and monetary policy but expressed satisfaction with how the two authorities have moderated their priorities.
Cardoso however, noted that Nigeria’s ability to attract these inflows will depend on investor confidence in our domestic reforms, particularly those ensuring macroeconomic stability and delivering positive real returns on investment.
Cardoso also said without the decisive policy interventions undertaken by the bank to reign in rising prices, inflation could have reached 42.81 per cent by December 2024.
He noted that the liquidity injections associated with unorthodox monetary policies, particularly since the COVID-19 pandemic, had created a significant overhang, adding that while these measures were intended to cushion immediate shocks, they did not translate into commensurate productivity growth, fueling inflationary pressures and heightened foreign exchange volatility.
He said excess naira liquidity in the system had amplified demand-driven inflation, further exacerbated by supply-side constraints stemming from structural deficits.
Nonetheless, he said the country had turned a corner, pointing out that disinflation was within reach.
He said, “However, we must remain committed to bold, coordinated policy measures to consolidate our progress”, adding that for inflation to be defeated, it required serious collaboration between the fiscal and monetary side.
The central bank governor said these dynamics underscored the importance of a disciplined and coordinated approach to monetary policy to restore stability.
However, the Monetary Policy Committee (MPC) had in response initiated a tightening cycle using orthodox approaches.
Throughout 2024, the bank implemented several bold policy measures across six MPC meetings, including raising the Monetary Policy Rate (MPR) by a cumulative 875 basis points to 27.50 percent, increasing the Cash Reserve Ratio (CRR) of Other Depository Corporations (ODCs) by 1,750 basis points to 50 percent, and adjusting the asymmetric corridor around the MPR.
Cardoso pointed out that the past year presented significant challenges, including persistent inflationary pressures exacerbated by global and domestic shocks.
He noted that despite these headwinds, the CBN’s commitment to price and monetary stability had yielded measurable progress.
He said, “We have seen relative stability in the foreign exchange market, a narrowing exchange rate disparity, and a rising external reserves of over $40 billion as of December 2024.”
Specifically, Cardoso stressed that inflation erodes purchasing power, discourages investment, and exacerbates inequality, adding that managing the disinflation process requires a careful balance of policies that mitigate short-term costs while anchoring long-term stability.
He said the CBN was fully committed to ensuring price stability while minimising adverse effects on growth and livelihoods.
Cardoso noted that beyond monetary policy, the bank undertook critical reforms to strengthen the financial system and ensure macroeconomic stability.
He said the unified multiple exchange rate window was established to enhance efficiency in the FX market. According to him, the reform yielded tangible results, with remittances through International Money Transfer Operators (IMTOS) rising 79.4 per cent in the first three quarters of 2024 to $4.18 billion, compared to $2.33 billion in the same period of 2023.
He said the bank also cleared a backlog of FX commitments totaling $7.0 billion, restoring market confidence and improving FX liquidity.
He said the central bank also lifted restrictions on 41 items previously banned from access to the official FX market, a measure introduced in 2015, as well as introduced new minimum capital requirements for banks, effective by March 2026, to strengthen the resilience and global competitiveness of Nigeria’s banking sector, positioning it to support the ambition of a $1 trillion economy.
The CBN among other things, launched the WeFI initiative under the National Financial Inclusion Strategy, designed to bridge the gender gap in financial access, empowering women through financial services, education, and digital tools.
He said, “These reforms reflect our commitment to creating an enabling environment for inclusive economic development. However, achieving macroeconomic stability requires sustained vigilance and a proactive monetary policy stance.”
He said the forum underscored the CBN’s unwavering commitment to improving communication, fostering dialogue, and collaborating on the critical issues shaping monetary policy.
CBN Deputy Governor, Economic Policy Directorate, Mr. Muhammad Sani Abdullahi, pointed out that while the economy is undergoing significant transformations, there are diverse perspectives on its trajectory.
He said this uncertainty posed a serious challenge for policymakers, as it necessitates a comprehensive understanding of these shifts to navigate the economy through them effectively.
He said, “Over the past few years, our policy focus has been on stabilising inflation amidst profound uncertainties. While we have made commendable progress in managing inflationary pressures (month-on-month) and boosting investors’ confidence, our work is far from complete.
“Our disinflation efforts, unfortunately, have been fraught with challenges, including persistent demand and supply-side shocks, which have hindered our ability to achieve a single-digit inflation target.
“These shocks, among other reasons, have necessitated decisive policy actions to prevent entrenched inflationary expectations. This highlights the critical importance of maintaining robust communication and engagement with stakeholders, a commitment exemplified by this forum.”
Abdullahi said the journey toward price stability and sustainable economic growth remained a shared responsibility., noting that while the CBN has taken decisive steps to mitigate inflationary pressures and stabilize the economy, the success of these efforts lies on the active cooperation of all stakeholders.
He said policymakers, industry leaders, the academic community, and our international partners must work hand in hand to ensure that the policies we implement today lead to desirable outcomes within the short to medium-term.
Speaking at the forum, Minister of Budget and Economic Planning, Senator Abubakar Bagudu, commended the cooperation between the fiscal and monetary policy authorities, saying it is in the best interest of the country’s economy.
He noted, “In the last 18 months, we have seen increased collaboration between fiscal and monetary authorities, and something maybe least appreciated is that we have a president who himself is very knowledgeable on the trade-offs involved between fiscal and monetary policy and the Renewed Hope Agenda in a way is a balancing act.”
He explained, “The central bank and the fiscal authorities are clear in their priorities and objectives, and no doubt disagree. But that’s how it should be. It should be healthy because when the expenditure-to-GDP ratio is lower than it should be, our first significant objective is to increase revenue-to-GDP and grow the revenue-to-GDP and expenditure-to-GDP ratio.
“We also have to deal with balancing inflation and driving economic growth, especially in an inclusive manner, as contained in the Renewed Hope Agenda. Where we think opportunities still lie is that the elasticity of our productivity is still strong, meaning we can drive productivity growth rapidly.”
He said that while the fiscal authority believed it should spend more on domestic production because the country had strong absorptive capacity in agriculture and solid minerals, it appreciated the central bank’s position that it would not intervene directly.
However, Bagudu pointed out that it was essential to invest more in agriculture, mainly because of the incremental security gains, which had enhanced production in challenged farming areas in the Northwest and Northeast.
He said the enhanced agricultural production was helping to bring down food prices across the country.
The minister said, “Borno State recorded one of the highest harvests comparable to the pre-Boko-Haram era. Kaduna State is improving, and many other states are improving. So, how do we ensure that we don’t miss that opportunity? Yes, we might have been disappointed with some of the interventions in the past, but maybe we have gained knowledge to calibrate and ensure that we do better in a way that will support further growth in domestic production because the transmission mechanism between domestic output and productivity gains, and inflation effort is very strong.”
He emphasised that the administration’s economic reforms were working and had set the economy on the right path of inclusive growth and development, as acknowledged by global business leaders and rating agencies.
Bagudu stated, “Mr Governor, we were in Saudi Arabia with your deputy on Christmas Eve. As Nigerians, we have every reason to congratulate ourselves. We met with three ministers, who acknowledged that we are undertaking reforms even bolder than theirs because they recognise they are a monarchy.
“So, they withdrew petroleum, electricity, and B80 subsidies at 15 per cent, including on food, to turn their economy in the right direction. But they acknowledge that we have done more in the last 18 months. And given that we are facing an election, they reckon our challenge was even more than theirs.
“That is the biggest thumb among all the international rating agencies that have told us we can do this together. I thank you for inviting us. And this handshake, I believe, will continue to evolve into a better mix of policies that will create deflation and generate double-digit inclusive growth.”
*FIRS collect records
Meanwhile, Adedeji while addressing top management staff at the retreat, said the revenue agency will position technology as a central driver of tax administration by expanding integrated systems for end-to-end digital processing, enhancing taxpayer platforms for seamless access, and leveraging emerging technologies for audits, compliance, and fraud detection to unlock new revenue opportunities.
He warned that every department in the service must achieve their key deliverables, adding that the era of setting targets and not meeting such was over.
Adedeji said the retreat was organised to map out strategies and deliverables for the year.
He further described FIRS as a cornerstone of the nation’s economic stability, a vital pillar upholding the country’s progress, and an agent of renewed hope for all Nigerians.
He said, “But let me remind you that this success is not just ours to celebrate. The FIRS is more than a revenue authority.
“Our work enables the delivery of critical infrastructure, social services, and opportunities that transform lives. We are not just staff members; we are agents of the nation, entrusted with a responsibility that goes far beyond the walls of this organisation.
“The year 2024 was pivotal in laying a solid foundation for transforming the Federal Inland Revenue Service into a globally recognised, efficient, and trusted revenue authority. It marked a period of strategic growth, positioning the service as a cornerstone of Nigeria’s economic progress.”
He encouraged the staff to step confidently into 2025 with the momentum of these achievements with renewed energy, clear vision, and a meticulously designed roadmap.
Adedeji said the service will focus on consolidating and institutionalising its internal strengths to ensure long-term resilience and operational excellence in the year.
He said, “This year, our mission is both ambitious and transformative: to build a service of excellence defined by the expertise of our people, the modernization of our facilities, and the innovative use of technology to enhance our processes.
“This mission is not just about sustaining our success but about consistently elevating our impact and solidifying our position as a model revenue authority on the global stage.
“To achieve this, we have outlined a strategic roadmap, anchored on three critical pillars:
capacity building and training: We will empower our workforce with the tools, knowledge, and skills needed to excel in modern tax administration.”
He added that through targeted, high-impact training programmes, aligned with global best practices, “we will enable you to navigate complexities, embrace innovation, and provide stellar service to taxpayers”.
He said the service we continue to invest in
revitalising its workspaces, ensuring they reflect the vision of a world-class institution, stressing that from modernised offices to sustainable practices, “our facilities will serve as an environment that fosters excellence and productivity.”
He also emphasisied that technology will drive its transformation in 2025, expanding its integrated tax administration systems, unifying national platforms on collection, leveraging emerging technologies.
He said by enhancing taxpayer-facing platforms, the service will create seamless, efficient, and transparent processes that redefine the taxpayer experience.
He pointed out that these strategic pillars are not abstract ideas but practical, actionable objectives that will be realised in every group, department, and operation within the service, adding that “They represent a unified direction for the FIRS, one that prioritises excellence, innovation, and impact”.
He added, “So, let us embrace 2025 with courage and purpose, turning challenges into opportunities and possibilities into achievements. Together, we will propel FIRS to unparalleled heights, setting a new benchmark for distinction and redefining what success means.”
