By Arize Nwobu
TUE OCT 27 2026-theGBJournal| The role of the Central Bank of Nigeria( CBN) in the economic reforms can be likened to that of a gyrostat.
A gyrostat is a stabilising mechanism which is used to stabilise ships, spacecraft and other scientific instruments.
“It is adapted in ship stabilisers to reduce the rolling motion caused by ocean waves and improving passengers comfort.”
CBN has figuratively played the role of a ‘gyrostat’ in the economic reforms and the Bank has been acknowledged by some notable experts and institutions for helping to stabilise and restore confidence in the system.
Though there are still more mileages to gain going forward, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele had credited CBN with helping to stabilise and restore confidence in the economy.
The Minister also appreciated the rise in foreign reserves and a balance of payment surplus of USD5billion in 2025 among other pluses.
Former CBN Governor, now the Emir of Kano, Sanusi Lamido Sanusi had also commended CBN. “I have nothing but positive words for what CBN has done”, he said.
World Bank sees CBN reforms as “bold, credible and necessary” and particularly highlighted the monetary tightening, clearing of forex backlog and unification of the exchange rate.
It further noted and that the policies were necessary for achieving a more stable and prosperous economy and that the reforms improved economic performance in 2026.
The Managing Director, Operations, Anna Bjerde described Nigeria as “a global example of credible and consistent reform leadership.”
CBN Governor, Olayemi Cardoso had noted that CBN ‘s actions would continue to reflect the policy direction they articulated from the onset and that they would continue to do what they said they would do transparently and consistently.
The apex Bank’s aggressive fight against inflation and the transition from a multiple exchange rate regime to a unified exchange rate regime are two of the major policies of the Bank which contributed to engender macroeconomics stability and restore confidence in the system.
There are different types of exchange rate regimes and countries are free to determine which exchange rate they will apply to their currency.
The choice of exchange rate is crucial because it is a major macroeconomic variable which determines the energetic inflows, dynamic and health of the economy.
Prior to the transition to the present unified exchange rate, the former multiple exchange rates regime was noted to be prone to economic distortions and misallocations, rent-seeking, arbitrage and speculative attacks.
Speculators exploit the weakness of a currency and create a destabilising impact. They sell a currency when it is weak and expect it to get weaker, or buy it when the price rises in anticipation that it would rise further.
It has also been noted that multiple exchange rates could cause inflation in the long run because it could make a government to incur losses in foreign currency transactions and which could cause the Central Bank to print money to fix the losses and which would trigger inflation in the long run.
The present unified exchange rate has evidently made business planning easier and restored confidence in the economy. In a press report, Chairman, BUA Group, Abdul Samad Rabiu noted that “today I hardly need to go to CBN”.
“In the past we had to make a pilgrimage every every two weeks to the Central Bank of Nigeria. Businesses can now access dollars through the mmarket at prevailing rate rather than rely on direct allocations.”
The present exchange rate regime has removed the distortions of the previous regime and created easier access to dollars.
It eliminated rent-seeking and arbitrage and reduced CBN’s interventions which often contributed to the depletion of foreign reserves and now the Bank has the latitude to build up foreign reserves which has increased up to USD55.1billion.
CBN’s policy measures have engendered a shift from vulnerability to strength and there has been a reduction of pressure on the naira due to a growing and healthier foreign reserves.
The Governor, Olayemi Cardoso had noted that CBN would continue to implement policies that would enhance macroeconomic stability, promote private sector growth and create high quality jobs.
Based on current developments in the economy thus far as per the metrics the outlook is promising but every necessary efforts should be made by both the fiscal and monetary authorities to connect the metrics with the markets which is to translate the macroeconomic gains to the micro level.
Nwobu, is a Lagos- based Chartered Stockbroker and Policy Analyst. Tel: 08033021230.
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