CBN Warns of Economic Risks from Excess Liquidity in 2027 Elections

The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, has cautioned about the potential negative impact of excess liquidity resulting from election spending in the upcoming 2027 elections. Speaking at a meeting in Abuja, Cardoso highlighted the importance of managing the large volume of money circulating within the financial system to prevent renewed inflationary pressures that could erode current economic gains. He stressed the need for careful management to avoid destabilizing the economy and undermining the reforms that have helped stabilize prices and restore confidence.

Cardoso emphasized that monetary policy alone cannot sustainably deliver low and stable inflation, especially in the face of shocks like food supply disruptions and high energy costs. He called for fiscal discipline, improved revenue mobilization, efficient public spending, and stronger coordination between fiscal and monetary authorities. Cardoso also noted the critical role of state governments in managing liquidity and inflation, as they control a significant portion of federal revenues that influence macroeconomic outcomes.

The CBN Governor highlighted the country's increasing net foreign reserves, which reached $49 billion by February 5, 2026, attributing the growth to inflows from remittances and non-oil exports. Cardoso mentioned ongoing efforts to recapitalize banks to strengthen the sector and support Nigeria's long-term economic goals, including building a $1 trillion economy. He also emphasized the need for clear rules to ensure smooth leadership transitions in the banking sector.