The Federal Government and the Central Bank of Nigeria (CBN) have signed a Memorandum of Understanding (MoU) to strengthen coordination on key economic policies, including inflation control, public debt, government borrowing, liquidity, and foreign exchange management.
The agreement, signed in Abuja on Friday, establishes a formal framework for collaboration between the Federal Ministry of Finance and the apex bank, while preserving the CBN’s operational independence.
CBN Governor, Olayemi Cardoso, said the pact would enhance policy coherence and improve economic management.
“This Memorandum provides a structured framework for regular consultation, information exchange and policy coordination,” Cardoso noted. “It will strengthen collaboration in critical areas such as government cash management, debt issuance planning, liquidity forecasting, macroeconomic analysis and periodic policy consultations.”
He stressed that fiscal and monetary policies are complementary, adding that the timing of the agreement was significant as the CBN advances its transition towards an inflation-targeting framework.
Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, explained that the framework would prevent fiscal and monetary policies from working at cross purposes. He emphasized that the CBN’s independence would remain intact.
“The operational independence of the Central Bank remains sacrosanct. Coordination must never become fiscal dominance,” Oyedele said.
He added that the government’s objective is to reduce inflation sustainably to single digits, noting that fiscal discipline, efficient cash management and borrowing practices that do not crowd out private investment are essential. Oyedele also identified food costs, energy, logistics and imported inflation as structural drivers, pledging reforms in agriculture and infrastructure to ease pressure.
On fuel subsidy, the minister ruled out its return, warning that reinstating it would destabilize public finances and weaken the naira.
CBN Deputy Governor, Dr Muhammad Abdullahi, highlighted the importance of coordination amid global uncertainties, including geopolitical tensions affecting oil prices and shipping routes. He said the agreement would support joint technical analysis, scenario planning and stress testing to prepare for shocks.
Permanent Secretary of the Finance Ministry, Raymond Omachi, added that the framework seeks to balance inflation control with economic growth. He explained that aligning borrowing plans with liquidity management would prevent government debt from crowding out private sector credit.
The pact is expected to institutionalize decades of informal collaboration between the finance ministry and the CBN, ensuring that fiscal and monetary policies reinforce each other in pursuit of stability and growth.
Advertise on NigerianEye.com to reach thousands of our daily users
No comments
Post a Comment
Kindly drop a comment below.
(Comments are moderated. Clean comments will be approved immediately)
Advert Enquires - Reach out to us at NigerianEye@gmail.com