CBN Targets 6–9% Inflation Amid Global Risks: Strengthens Monetary Policy Framework
The Central Bank of Nigeria (CBN) has announced a medium-term inflation target of 6–9 per cent as part of its shift toward a full inflation-targeting monetary policy framework. The apex bank, however, cautioned that external shocks, such as global geopolitical tensions and volatile energy prices, could still disrupt progress. This announcement came following a strategic engagement with the Nigerian Economic Society (NES) and academic stakeholders on March 18, 2026, where the CBN outlined its reform strategy and macroeconomic outlook.
Dr. Muhammad Sani Abdullahi, CBN Deputy Governor for Economic Policy, explained that adopting an inflation-targeting framework signals a move toward a more transparent, rules-based policy approach anchored on price stability. “Stabilising inflation expectations would help lower risk premia, support long-term investment plans, and enable policymakers to look beyond short-term disruptions,” he said, stressing the importance of credibility and market trust in achieving these goals.
Recent data suggests the early stages of reform are already yielding results. Headline inflation has moderated from 34.8% in late 2024 to 15.1% by early 2026, driven by sustained monetary tightening and improved policy discipline. According to Dr. Abdullahi, inflation targeting will act as a “crucial nominal anchor” for the economy, enhancing transparency, accountability, and overall policy effectiveness while guiding market expectations.
To support the transition, the CBN has implemented a range of reforms, including a return to orthodox monetary policy tools, withdrawal from quasi-fiscal interventions, and significant foreign exchange reforms like rate unification and electronic trading platforms. The apex bank also highlighted financial system stabilization efforts, such as bank recapitalization and stricter prudential oversight, alongside improved coordination between monetary and fiscal authorities.
Experts emphasized that public trust and academic collaboration are critical to the success of inflation targeting. Dr. Victor Oboh, Director of the CBN’s Monetary Policy Department, said, “The effectiveness of any monetary framework depends not only on technical capacity but also on communication and public confidence.” Dr. Baba Yusuf Musa, President of the Nigerian Economic Society, praised the CBN’s reform approach as “bold and necessary for long-term macroeconomic stability,” pledging continued support and collaboration with the apex bank.
source: nairametrics