CBN Targets Single-Digit Inflation as Nigeria Shifts to New Monetary Policy Framework
Nigeria’s central banking authority, Central Bank of Nigeria (CBN), has reaffirmed its commitment to bringing inflation down to single digits, marking a significant step in the country’s ongoing economic reforms. The move is part of a broader transition to an inflation-targeting monetary policy framework aimed at ensuring long-term price stability and restoring investor confidence.
The announcement followed a high-level engagement between the apex bank, the Nigerian Economic Society, and members of the academic community in Abuja. Speaking at the session, Deputy Governor for Economic Policy, Muhammad Abdullahi, described the shift as a major evolution in Nigeria’s monetary policy approach, emphasizing the need for transparency, credibility, and forward-looking decision-making.
According to the CBN, the new framework is designed to anchor inflation expectations and reduce vulnerability to external shocks such as global energy price volatility and geopolitical tensions. Abdullahi noted that stabilizing inflation would not only lower economic uncertainty but also reduce borrowing costs and encourage long-term investments critical for national growth.
The bank highlighted several reforms already underway to support this transition, including a return to orthodox monetary policy tools, foreign exchange market liberalization, and the gradual withdrawal from quasi-fiscal interventions. It also pointed to improved banking sector resilience through recapitalization efforts and stronger oversight, alongside better coordination with fiscal authorities to ensure policy alignment.
Encouragingly, early results suggest progress, with inflation dropping from 34.8 percent in late 2024 to about 15 percent by early 2026, according to data from the National Bureau of Statistics. Looking ahead, the CBN is targeting an inflation range of 6–9 percent in the medium term. Stakeholders, including academics and policymakers, have welcomed the reforms, stressing that sustained discipline, public trust, and clear communication will be key to achieving lasting economic stability.
source: punch