FG, CBN Sign MoU to Deepen Fiscal-Monetary Coordination, Target Single-Digit Inflation
By Pan Afric Reporters
The Federal Government and the Central Bank of Nigeria (CBN) have signed a Memorandum of Understanding (MoU) to institutionalise closer coordination between fiscal and monetary policies, with a major focus on economic stability, policy consistency and bringing inflation sustainably into single digits.
The development was contained in a statement issued by Efe Ovuakporie, Head, Information and Public Relations Unit, Federal Ministry of Finance, on Friday, September 18, 2026, following the signing ceremony in Abuja by the Federal Ministry of Finance and the CBN.
Speaking at the ceremony, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the framework would strengthen information sharing, align macroeconomic assumptions and forecasts, and establish clearer mechanisms for resolving areas where fiscal and monetary policies could work at cross purposes.
Oyedele said the agreement was designed to move policy coordination beyond individual personalities and make it a permanent feature of Nigeria’s economic management.
He stressed that although the Ministry of Finance and CBN have distinct mandates and must retain their institutional independence, their decisions ultimately affect the same economy and therefore require greater coordination.
According to him, government borrowing has implications for liquidity, interest rates and financing costs, while monetary policy decisions also affect government finances. He added that exchange rates, tariffs, government spending and agricultural policies similarly influence prices, government revenue and economic activity.
Oyedele identified the sustainable reduction of inflation to single digits as a key objective of the new framework, stressing that the target could not be achieved through monetary policy alone.
He said the Ministry would contribute through disciplined spending, sound cash and liquidity management and more efficient government financing, while fiscal interventions would focus on structural drivers of inflation, particularly food, energy, imported costs and logistics.
On food inflation, the Minister said the government would work with relevant institutions and state governments to strengthen grain reserves, improve agricultural yields and irrigation, build climate resilience and address farm-to-market infrastructure gaps.
Oyedele also ruled out a return to fuel subsidy, arguing that such a policy would put additional pressure on public finances and the naira. He said improved foreign exchange stability and tax exemptions on fuel had contributed to moderating prices.
The Minister emphasised the importance of reliable economic data to effective policy coordination, saying the Ministry was working with the National Bureau of Statistics to improve the quality and range of data available for economic decision-making.
Under the new framework, the Ministry and CBN will strengthen information sharing on government cash positions, financing plans, credit growth and foreign exchange flows.
“Better coordination starts with a common evidence base,” Oyedele said.
The Minister also pointed to recent economic indicators which, according to him, showed increased confidence in the Nigerian economy, citing a balance of payments surplus of more than $5 billion in 2025 and external reserves exceeding $54 billion.
He also cited increased non-oil exports, declining refined-product imports as domestic refining capacity expands, Nigeria’s return to Frontier Market status and its inclusion in JPMorgan’s new frontier local-currency government bond index.
Oyedele, however, said the government’s objective extended beyond short-term portfolio inflows to attracting patient capital capable of translating into factories, infrastructure, technology and jobs.
He said achieving that objective required policy consistency and certainty, alongside a regulatory environment that avoided unnecessary burdens on businesses, while the coordination framework would also consider the economic consequences of insecurity and illicit financial flows.
“Nigeria has one economy. Fiscal policy cannot succeed without price stability; monetary policy cannot deliver price stability if fiscal policy pulls in the opposite direction,” Oyedele said.
The Minister said the Finance Ministry would continue to pursue fiscal discipline, improved liquidity management, stronger transparency and data systems, more efficient financing and reforms aimed at increasing production and addressing structural sources of inflation.
On his part, CBN Governor Olayemi Cardoso described the MoU as a significant step towards strengthening Nigeria’s macroeconomic management and economic stability.
Cardoso said fiscal and monetary policies were complementary instruments whose combined impact was stronger when they operated in harmony.
He clarified that the agreement did not create a new relationship between the two institutions, which have collaborated over the years on inflation management, debt sustainability, budget financing, exchange-rate stability and responses to economic shocks.
Rather, he said, the MoU formalised the longstanding collaboration through structured processes for regular consultation, information exchange and policy coordination.
According to Cardoso, the framework would deepen cooperation in government cash management, debt issuance planning, liquidity forecasting, macroeconomic analysis and periodic policy consultations.
The CBN Governor said the timing was particularly important as the apex bank advances its transition towards an inflation-targeting framework, whose effectiveness also depends on a supportive fiscal environment.
Cardoso commended Oyedele and the technical teams of both institutions for bringing the initiative to fruition, reaffirming the CBN’s commitment to sound monetary policy, macroeconomic stability and financial system resilience.
He said the strengthened partnership would contribute to building a more stable and resilient Nigerian economy capable of creating greater opportunities for citizens.
