The Federal Government and the Central Bank of Nigeria have signed a Memorandum of Understanding to strengthen coordination between fiscal and monetary authorities and improve economic stability.
The agreement was signed by the Federal Ministry of Finance and the CBN as part of efforts to promote policy consistency, improve information sharing and strengthen joint responses to inflation and other macroeconomic challenges.
The development was disclosed in a statement on Friday by the Head of the Ministry’s Information and Public Relations Unit, Efe Ovuakporie.
Speaking at the signing ceremony, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the agreement would institutionalise cooperation between the two institutions rather than leave it dependent on individual officials.
He said the framework would provide for the sharing of economic information, alignment of macroeconomic assumptions and forecasts, and mechanisms for addressing conflicting policy actions.
According to Oyedele, although the ministry and the CBN have separate mandates, decisions taken by one institution can have significant consequences for the other.
He cited government borrowing as an example, noting that fiscal decisions on borrowing could affect liquidity, interest rates and financing costs, while monetary policy decisions could also affect government finances.
The minister said exchange rates, tariffs, government spending and agricultural policies similarly influence inflation, government revenue and broader economic activity.
Oyedele identified the sustainable reduction of inflation to single-digit levels as one of the key objectives of the framework.
He said this would require disciplined government spending, effective liquidity management and efficient financing, alongside measures to address structural drivers of inflation.
On food inflation, the minister said the government would work with relevant institutions and state governments to strengthen grain reserves and improve agricultural productivity.
He listed irrigation, climate resilience and farm-to-market infrastructure among areas requiring greater attention.
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 attributed recent moderation in prices partly to improved foreign exchange stability and fuel tax exemptions.
The minister stressed that reliable economic data would be critical to the success of the new coordination framework.
He said the Finance Ministry was working with the National Bureau of Statistics to improve the quality and scope of data available for economic decision-making.
Under the MoU, the ministry and the CBN will share information covering government cash positions, financing plans, credit growth and foreign exchange flows.
“Better coordination starts with a common evidence base,” Oyedele said.
He also pointed to what he described as improving external-sector conditions, including a balance of payments surplus of more than $5bn in 2025 and foreign exchange reserves exceeding $54bn.
The minister cited growth in non-oil exports and declining refined petroleum product imports as domestic refining capacity expands.
He also noted Nigeria’s return to Frontier Market status and its inclusion in JPMorgan’s new frontier local-currency government bond index.
Oyedele said the government’s objective was not limited to attracting portfolio investments but also to drawing capital into factories, infrastructure, technology and job creation.
He stressed the importance of policy consistency and regulatory certainty in creating a more predictable environment for businesses.
The framework, he added, would also take into account the economic effects of insecurity and illicit financial flows.
He said the government would continue to pursue fiscal discipline, improved liquidity management, greater transparency and stronger economic data systems.
