The Federal Government and the Central Bank of Nigeria (CBN) have signed a memorandum of understanding (MoU) to institutionalise coordination between fiscal and monetary policy authorities.
Gatekeepers News reports that the agreement comes as the CBN advances its transition towards an inflation-targeting regime, under which price stability is expected to remain at the centre of monetary policy while improving policy predictability.
Speaking at the signing ceremony in Abuja, CBN Governor Olayemi Cardoso said the MoU would establish a structured framework for regular consultation, information exchange and policy coordination between the apex bank and the Ministry of Finance.
“This occasion marks a significant milestone in our nation’s pursuit of stronger macroeconomic management, lasting economic stability and sustainable prosperity for all Nigerians,” Cardoso said.
“Beyond the signing of a document, it represents a shared commitment to deepen collaboration in the interest of our economy and our people.”
According to the governor, the agreement would strengthen coordination in areas including government cash management, debt issuance planning, liquidity forecasting, macroeconomic analysis and periodic policy consultations.
“It transforms a relationship built on practice into one anchored by clear processes and enduring institutional commitment,” he said.
“By establishing predictable mechanisms for engagement, the framework will improve the quality of decision-making, reduce uncertainty and strengthen our capacity to respond effectively to emerging economic challenges.”
Cardoso said the timing of the agreement was particularly important as the CBN continues its transition towards an inflation-targeting framework.
“The success of inflation targeting is known to rest not only on the effectiveness of monetary policy, but also on the existence of a supportive fiscal environment,” he said.
He added that the MoU would provide a foundation for developing the operational framework for the inflation-targeting regime, with regular dialogue and coordinated policy assessments expected to help both institutions align their actions and minimise policy trade-offs.
“What distinguishes today’s event is the formal institutionalisation of that collaboration,” Cardoso said.
He said stronger fiscal and monetary policy coordination had become increasingly important as economies contend with geopolitical tensions, financial-market volatility and other global uncertainties.
“Economic stability is strengthened, investor confidence is enhanced, policy outcomes improve and the foundation for sustainable growth becomes more secure,” he said.
Cardoso reaffirmed the CBN’s commitment to sound monetary policy, macroeconomic stability and financial-system resilience.
Also speaking, Taiwo Oyedele, Minister of Finance and Coordinating Minister of the Economy, said the MoU would ensure that fiscal and monetary policy coordination was institutionalised rather than dependent on the individuals occupying key positions.
“Our mandates are distinct; our outcomes are interconnected. That is the philosophy behind this MoU,” Oyedele said.
“Our objective is to bring inflation sustainably into single digits and keep it there — and that cannot be monetary policy’s job alone.”
He said the framework would strengthen information sharing, align macroeconomic assumptions and establish clearer mechanisms for resolving policy conflicts.
