The Olayemi Cardoso-led Central Bank of Nigeria (CBN), recognising the critical role of communication in safeguarding economic stability, has taken decisive action to clarify its recently published Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for fiscal years 2024 -2025. Following several instances of misinterpretation, the CBN has withdrawn its Monetary Policy Circular No. 45 to prevent further confusion and restore accuracy in media reporting.
This proactive step underscores the CBN’s dedication to transparency and accountability. As Nigeria navigates its complex economic landscape, the apex bank remains steadfast in its role as the custodian of monetary policy, ensuring that stakeholders have access to clear and accurate information. The move reflects a deep understanding of the ripple effects that misinformation can have on the broader economy, from market stability to investor confidence.
The Monetary Policy Circular No. 45 is not just another document; it’s also a vital tool for guiding financial institutions, businesses, and policymakers. The publication serves as a comprehensive compilation of policies issued by the CBN up to December 31, 2023. Far from introducing new policies, the document is designed to serve as a single reference source for stakeholders, providing clarity and ease of access to critical financial regulations.
Its key purposes are threefold:
1. Streamlined Access: By consolidating previously issued policies, the guidelines offer a convenient point of reference, enabling stakeholders to make informed decisions based on accurate and timely information.
2. Conflict Resolution: As an authoritative source, the guidelines help resolve disputes or conflicting interpretations of monetary policies, ensuring that the CBN’s directives are properly understood and applied.
3. Policy Clarification: The document helps to clarify any policies that may have been misinterpreted, ensuring consistency in how CBN directives are implemented.
While the CBN has been publishing these guidelines for years, the 2024 – 2025 edition has become a subject of misrepresentation, largely due to confusion over the status of certain policies and directives. The CBN has made it abundantly clear that the guidelines cover policies in effect up until the end of 2023. Any policy updates or revisions that occur after this period are not reflected in the circular and should be viewed separately.
Recent media reports have unfortunately misrepresented the content of the CBN’s guidelines, leading to public confusion about the status of certain policies. Among the most notable misinterpretations was the treatment of the Cyber Security Levy, a policy referenced in the guidelines that was actually suspended in May 2024. Despite this suspension, some reports presented the levy as an active policy, sparking unnecessary concern among stakeholders.
Another significant area of misreporting was the mischaracterisation of the relationship between fuel subsidy removal and Nigeria’s external reserves. Some outlets incorrectly linked the CBN’s guidelines to fuel subsidy policies, suggesting that the removal of the subsidy had direct implications for the nation’s reserves. This analysis missed the circular’s intention, which was to highlight potential risks that had already been mitigated by subsequent CBN policies, particularly around foreign exchange and economic stabilisation.
These examples of misinterpretation underscore the importance of accurate reporting on monetary policy. The CBN’s decision to temporarily withdraw the circular is a testament to its commitment to maintaining clarity in the public domain and avoiding the far-reaching consequences that misinformation can have on the economy.
One of the key messages the CBN has emphasised is that the Monetary Policy Circular No. 45 is not a static document. The guidelines reflect policies that were current as of December 31, 2023, but the CBN reserves the right to update or revise these policies as new developments arise in both domestic and global economies. This adaptability is clearly stated within the document itself:
“The Guidelines may be adjusted by the CBN without prior notice, to address new developments in the domestic and global economies in the period. However, such amendments shall be communicated to the relevant institutions/stakeholders in supplementary circulars.”
This flexible approach ensures that the CBN can respond swiftly to emerging economic challenges while also providing stakeholders with a reliable reference point for the policies that were in effect up to the end of 2023. By remaining adaptable, the CBN can continue to play a pivotal role in guiding Nigeria’s economy through periods of uncertainty, ensuring that monetary policies remain responsive to both local and global shifts.
To further reinforce this commitment to clarity, the guidelines provide stakeholders with clear avenues for seeking additional clarification. Pages 147 and 148 of the circular outline the procedures for obtaining more information, emphasising the CBN’s openness and accessibility when it comes to addressing any concerns or ambiguities that may arise.
The CBN’s swift action in addressing the misrepresentation of its guidelines is a critical step in maintaining trust and confidence in Nigeria’s monetary system. Economic policies, when misunderstood or misrepresented, can have destabilising effects on markets and public perception. By taking decisive steps to clarify its position and prevent further misinterpretation, the CBN is safeguarding the integrity of Nigeria’s financial system.
Moreover, this move sends a powerful message to both domestic and international stakeholders: the CBN is committed to transparent and accountable governance. In an environment where investor confidence and market stability are closely tied to perceptions of economic management, the CBN’s leadership in addressing these issues head-on is crucial for ensuring that Nigeria remains an attractive destination for investment and economic growth.
In the wake of these misinterpretations, the CBN has issued a call for responsible and accurate reporting on its policies. The media, analysts, and other stakeholders play a critical role in shaping public perception of Nigeria’s monetary policies, and the CBN encourages all parties to seek clarification directly from the bank when in doubt.
Accurate reporting is not only essential for maintaining public trust, but also for ensuring that Nigeria’s economic policies are properly understood and applied. By fostering a culture of responsibility and accuracy, the CBN and the media can work together to support the country’s economic stability and growth.
As Nigeria continues to navigate a challenging global economic environment, the role of the central bank in shaping the country’s future cannot be overstated. The Monetary Policy Circular No. 45 serves as a testament to the CBN’s commitment to providing clear, consistent, and adaptable monetary policy direction.
Through its proactive efforts to address misinterpretations and maintain transparency, the CBN is ensuring that Nigeria’s financial system remains robust, resilient, and well-equipped to meet the challenges of the 21st century. Stakeholders can be confident that the CBN will continue to provide the leadership and guidance needed to foster long-term economic stability and prosperity for the nation.
As the CBN continues to uphold its mission, stakeholders are encouraged to engage with the apex bank directly for accurate information and to contribute to the shared goal of building a strong, stable, and thriving Nigerian economy.
Dambatta writes from Kaduna, Kaduna state.