By Samuel Akpan
The Federal Government and the Central Bank of Nigeria (CBN) have locked fiscal and monetary policy into a binding coordination pact, ending years of informal alignment as the apex bank drives toward an inflation-targeting regime built on price stability and clearer policy signals.
The Memorandum of Understanding was signed in Abuja by CBN Governor Olayemi Cardoso and Finance Minister Taiwo Oyedele, who also serves as Coordinating Minister of the Economy.
It creates a structured channel for regular talks, data exchange and joint policy work between the two institutions.
“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 at the Abuja ceremony.
“Beyond the signing of a document, it represents a shared commitment to deepen collaboration in the interest of our economy and our people,” the CBN governor added.
The pact is designed to tighten joint work on government cash management, debt issuance planning, liquidity forecasting, macroeconomic analysis and scheduled policy consultations between the treasury and the apex bank.
“It transforms a relationship built on practice into one anchored by clear processes and enduring institutional commitment,” Cardoso 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,” he added.
He said the timing is important as the CBN advances its move to inflation targeting. “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,” Cardoso said.
Stronger coordination has grown more urgent as economies face geopolitical tensions, market swings and other global shocks, he said. “What distinguishes today’s event is the formal institutionalisation of that collaboration,” the governor added.
Oyedele said the MoU would lock coordination into institutions rather than personalities.
“Our mandates are distinct; our outcomes are interconnected. That is the philosophy behind this MoU,” he said.
“Our objective is to bring inflation sustainably into single digits and keep it there — and that cannot be monetary policy’s job alone,” the finance minister said.
He said the framework would strengthen information sharing, align macroeconomic assumptions and provide clearer mechanisms for resolving policy conflicts.
The MoU will also provide the foundation for developing the operational framework for inflation targeting, with regular dialogue and coordinated policy assessments expected to help both institutions align their actions and minimise policy trade-offs.
“Economic stability is strengthened, investor confidence is enhanced, policy outcomes improve and the foundation for sustainable growth becomes more secure,” Cardoso said.