The Federal Government and the Central Bank of Nigeria (CBN) have deepened coordination between fiscal and monetary policies with the signing of a Memorandum of Understanding (MoU) aimed at strengthening economic stability and tackling inflation.
The agreement was signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and CBN Governor, Olayemi Cardoso.
The Fiscal-Monetary Policy Coordination MoU is designed to align macroeconomic assumptions and forecasts covering inflation, GDP growth, government revenue, liquidity, financing requirements and the external sector.
It also provides for stronger information-sharing between the Ministry of Finance and the CBN, with mechanisms to resolve areas where fiscal and monetary policies could work at cross-purposes.
Under the framework, the government plans a coordinated approach to inflation by combining disciplined fiscal spending with measures targeting food, energy and logistics costs.
The measures include strategic grain reserves, support for farmers, investment in rural roads and engagement with state governments on road levies and farm-access infrastructure.
The agreement also provides for continued measures to support fuel price stability without reintroducing consumption subsidies, alongside tax exemptions and exchange-rate stability measures.
The institutions will also work with the National Bureau of Statistics to expand economic data, including the development of a Producer Price Index as well as improved employment and productivity statistics.
The data expansion is expected to support the CBN’s transition towards an inflation-targeting framework.
The MoU further provides for closer coordination of government financing and cash management to reduce the risk of government borrowing crowding out private-sector credit.
It also calls for continued strengthening of fiscal governance institutions, including the Fiscal Responsibility Commission, Bureau of Public Procurement, NEITI and the Office of the Auditor-General.
Meanwhile, the government said Nigeria’s external position strengthened through 2025 and into 2026, with a balance-of-payments surplus of more than $5 billion recorded in 2025 and external reserves currently above $55 billion.
In the third quarter of 2026, non-oil exports reportedly outpaced oil exports for the first time, while imports of refined petroleum products declined as domestic refining capacity expanded.
The government also pointed to recent developments in global financial markets as evidence of improving investor confidence in Nigeria.
FTSE Russell has confirmed Nigeria’s return from Unclassified to Frontier Market status, effective September 21, 2026, citing improvements in foreign-exchange liquidity, capital repatriation and market accessibility.
JPMorgan also announced that Nigeria would be included in its new frontier local-currency government bond index.
Commenting on the reforms, Edun said, “Capital follows trust before returns. That is why policy consistency, certainty and clarity remain central to everything both institutions do.”
The agreement is expected to provide a more structured framework for fiscal and monetary authorities to work together in managing inflation, supporting investment and promoting sustainable economic growth.