The Federal Government and the Central Bank of Nigeria (CBN) have signed a Memorandum of Understanding (MoU) aimed at strengthening coordination on inflation, public debt, government borrowing, liquidity management and foreign exchange.
The agreement, signed in Abuja on Friday, establishes a formal framework for the Federal Ministry of Finance and the CBN to align key economic policies while preserving the operational independence of the apex bank.
CBN Governor, Olayemi Cardoso, said the agreement would deepen collaboration in areas including government cash management, debt issuance, liquidity forecasting, macroeconomic analysis and policy consultations.
According to Cardoso, effective inflation targeting requires not only sound monetary policy but also a supportive fiscal environment.
He noted that the Finance Ministry and the CBN had worked together over the years on inflation management, debt sustainability, budget financing, exchange-rate stability and responses to economic shocks, adding that the new agreement would formally strengthen the relationship.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the framework would help ensure that fiscal and monetary policies do not work at cross purposes.
Oyedele, however, stressed that the arrangement would not compromise the CBN’s autonomy.
He said the government’s objective was to bring inflation sustainably into single digits, noting that monetary policy alone could not resolve the country’s inflation challenges.
The minister identified food prices, import costs, energy and logistics as some of the structural drivers of inflation. He said the government would continue to pursue measures including stronger grain reserves, improved agricultural yields, irrigation and better access roads to farms.
Oyedele also ruled out a return to fuel subsidy, arguing that such a move could place additional pressure on public finances and the naira.
Meanwhile, the CBN Deputy Governor, Corporate Services Directorate, Dr Muhammad Abdullahi, said the agreement was particularly important amid global economic uncertainty and geopolitical tensions.
He noted that disruptions to energy and shipping routes could affect oil prices, government revenue, inflation, capital flows and financing conditions simultaneously.
Abdullahi said the framework would promote regular consultations, information sharing, joint technical analysis, scenario planning and stress testing between both institutions.
Also speaking, the Permanent Secretary of the Federal Ministry of Finance, Raymond Omachi, said the agreement was designed to balance inflation control with economic growth.
He explained that government borrowing and spending would need to be better coordinated with money-market liquidity management to avoid crowding out private-sector credit.
The framework will also cover foreign exchange management, revenue and exchange-rate stability, resilience to external shocks and regular data sharing between the Federal Government and the CBN.
