10 Things To Know About FG-CBN Fiscal-Monetary Policy Coordination MoU

The Federal Government and the Central Bank of Nigeria (CBN) have signed a Memorandum of Understanding (MoU) aimed at improving coordination between fiscal and monetary policies and strengthening Nigeria’s macroeconomic stability.

Here are 10 key things to know about the agreement:

1. It brings fiscal and monetary authorities closer together

The MoU creates a more structured framework for coordination between the Federal Ministry of Finance and the CBN, with the aim of ensuring that government spending and monetary policy work towards common economic objectives.

2. Economic forecasts will be better aligned

Both institutions will work with more consistent assumptions and forecasts on key indicators including inflation, GDP growth, government revenue, liquidity, financing requirements and the external sector.

3. Information-sharing will be strengthened

The agreement provides for more structured information-sharing between the two institutions and clearer mechanisms for resolving policy differences that could undermine economic stability.

4. Tackling inflation becomes a whole-of-government effort

The MoU provides for coordinated measures to address inflation, combining disciplined fiscal spending with interventions targeting food, energy and logistics costs.

5. Food costs will be addressed through several measures

The government plans to use measures including strategic grain reserves, farmer support, rural road investment and engagement with state governments on road levies and infrastructure linking farmers to markets.

6. Fuel price stability will remain a priority

The government says it will continue measures to support stability in fuel prices without reintroducing consumption subsidies described as distortionary. Tax exemptions and exchange-rate stability are among the measures being used to moderate pump prices.

7. More economic data will be generated

The government and the CBN, working with the National Bureau of Statistics, plan to expand and increase the frequency of economic data, including a Producer Price Index as well as employment and productivity statistics.

8. The framework supports inflation targeting

The additional economic data is expected to strengthen the CBN’s ability to operate an inflation-targeting framework by providing a broader and more timely picture of price pressures and economic activity.

9. Government borrowing and cash management will be better coordinated

The two institutions will coordinate government financing and cash management more closely to reduce the risk of public-sector borrowing crowding out credit available to businesses and other private-sector borrowers.

10. It reinforces fiscal governance and investor confidence

The framework also provides for continued strengthening of institutions including the Fiscal Responsibility Commission, Bureau of Public Procurement, NEITI and the Office of the Auditor-General.

The agreement comes as Nigeria’s external position strengthens, with the country recording a balance-of-payments surplus of more than $5 billion in 2025 and foreign-exchange reserves above $55 billion in 2026.

Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, said the objective was to build greater certainty around economic policymaking.

“Capital follows trust before returns,” Oyedele said. “That is why policy consistency, certainty and clarity remain central to everything both institutions do.”