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Home Economy

CBN’s shift to orthodox monetary policy restores investor confidence – Ugo Obi-Chukwu 

Israel Ojoko by Israel Ojoko
September 29, 2025
in Economy, Financial Services
Ugodre Obi-Chukwu named EY Entrepreneur (emerging category) of the year 2023

Nairametrics founder, Ugodre Obi-Chukwu

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Ugo Obi-Chukwu, the CEO of Nairametrics, says a shift by the Central Bank of Nigeria (CBN) to orthodox monetary policy has restored investors’ confidence.

Speaking on TVC News on Monday, Obi-Chukwu emphasized that orthodox policy requires interest rates to remain above inflation to attract foreign capital.

“When this central bank came about two years ago, one of the first things they said was they were going to adopt orthodox monetary policy,” Obi-Chukwu explained. “They weren’t going to do monetary policy the way the former central bank did; it was heterodox then.” 

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“Foreign investors were pulling out because inflation was rising and interest rates were low. So why would they bring their money here?” he asked. “You go back to orthodox policy, which means your interest rate has to be higher than your inflation rate, or at least tracking it.”  

This shift, he noted, has led to increased foreign exchange inflows and a more stable FX environment.

“Today, we’re seeing $142 billion in reserves. Some call it hot money, but hot money needs to come first before it paves the way for cooler money.” 

Rate Cuts Signal Global Shift Toward Growth 

Obi-Chukwu also addressed the recent interest rate cut by the CBN, describing it as a response to easing inflation.

“At the macro level, inflation numbers are trending down. So the central bank is responding to that slowdown,” he said. “That’s why we’ve seen a 50 basis point cut. Some even expect a 100 basis point cut at the next meeting.” 

He placed Nigeria’s monetary easing within a broader global context. “It’s not only happening in Nigeria. The U.S. has cut rates. The EU has cut rates. The U.K. has cut rates. We’re now gradually moving from hawkish monetary policy to one focused on engineering growth,” he added.

The shift, he said, reflects a global trend where central banks are pivoting from inflation control to stimulating economic expansion.

Zenith Bank’s Dividend Payout Reflects Sector Resilience 

Turning to the banking sector, Obi-Chukwu praised Zenith Bank’s interim dividend payout of N1.25 per share, with a post-tax profit of N532.2 billion.

“For some of us shareholders, it was a pleasant surprise,” he said. “A few months ago, we were worried banks might not pay dividends due to provisioning requirements from the central bank.” 

He noted that the ability to meet regulatory obligations and still reward shareholders signals strength.

“You’ve been able to bite the bullet and still pay dividends. That suggests resilience, especially in the environment we find ourselves in,” he said.  

Obi-Chukwu added that Zenith is among the 14 banks that have already met the CBN’s recapitalization threshold, reinforcing investor confidence.

Recapitalization and Lending Outlook for 2026 

Obi-Chukwu highlighted the recapitalization drive as a strategic move to redirect liquidity into productive sectors.

“Banks are coming off strong profits, boosted by exchange rate gains and high interest rates. They’re in a sweet spot for investors,” he said. “The fact that they’ve mopped up over N4 trillion shows how much cash is in the system.” 

Referencing CBN money supply data, he noted that Nigeria has over N510 trillion in circulation. “There’s so much money to mop up, and this fits into the CBN’s strategy of moving funds from non-productive to productive areas,” he explained.

Looking ahead, Obi-Chukwu expects increased lending activity. “Manufacturers are saying, ‘We’ve endured interest rates at 35%. You’ve mopped up all this cash. You’d better start lending to us now.”

 

 


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Tags: CBNCBN Monetary policyUgo Obi-Chukwu
Israel Ojoko

Israel Ojoko

Israel Ojoko is a dynamic journalist renowned for his in-depth coverage and insightful analysis on a diverse range of topics. With a keen eye for detail and a passion for storytelling, Israel has penned impactful articles on the economy, political developments, fintech, and cybersecurity, among many others. His dedication to uncovering the multifaceted narratives has established him as a trusted voice and influential figure in contemporary journalism.

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Comments 1

  1. Cji says:
    September 30, 2025 at 8:20 am

    Hot money investors are coming in to make a quick buck, but when we look at the real results, Emefiele still has better results which puts in a good argument for his unorthodox models.

    Here’s what data says

    Emefiele holds the record as attracting the highest foreign portfolio investment at about N 100bn between 2014 and 2023.

    Overall, Nigeria attracted highest FPI by president under Buhari. 2015 to 2023.

    Emefiele holds the top year of FPI inflows
    2019 and holds three of the top five years.

    Unfortunately Emefiele era got dealt the biggest economic crises in almost 100 years hence the challenges post 2020 and a setback on progress.

    But even then, latest rebased GDP shows that Emefieles policies grew Nigerias GDP to over $ 600 bn by 2022, which is the highest on record.

    Economic growth in 2022 resurgence to 4.32%
    Nigeria added 13 new economic sectors.
    In areas like ICT his policies spurred the highest investments propelling Nigeria to the top in Africa and adding five new Unicorns.
    What were all these investors coming to do?

    His special interventions birthed the biggest industrial complex in Nigerian history – Dangote etc.

    Of course his policies had flaws in the forex regime which needed to be fixed.

    What’s my point? Ugo Obi Chuckwu is viewing economic development models from a Western perspective as he has been trained to. The problem with those models is they don’t produce develooment. We’ve seen them for decades.
    They expose Nigeria and if a crises happens out there, our capacity crashes.
    They attact “hot money.”

    Emefieles policies created industry, Agric, ICT, etc. On all these areas, Nigeria grew to the top- top Agric producer in rice, maize etc on the continent, top ICT investment destination by 2021 and 2022, and top oil refiner on the continent.

    These are not hot money. They are things that cannot be shaken by a crises in Wall street or elsewhere.

    Countries like China and Vietnam have achieved their levels of progress because they have practiced unorthodox policies, held them down for decades and only tweaked aspects that are not working.
    Currency controls, forex controls, subsidies, gradual foreign investments, state control of sectors etc.

    Orthodox policies are simply Western models which open the field to western players. But if we stick to our models and fine tune then, these players will adjust. Like they did between 2017 and 2019.

    This is why President Tinubu was always one who argued against structuring economies primarily for foreign investment.
    He was right. Ses Argentina. After being a darling of investors, a little political situation at home, they pulled out and the currency crashed and requited multi billion defending.

    I pray that we do not experience again, what we saw in 1986 to 1992, where reforms truncated local prodictio targets, opened up to foreign investors, initially produced 11.9% growth and then eventually drove the country to the lowest levels.

    I wish the President success as he navigates these waters.

    Reply

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