The Central Bank of Nigeria, CBN, and the Federal Ministry of Finance have signed a landmark Memorandum of Understanding, MoU, on Fiscal-Monetary Policy Coordination to end years of policy misalignment and strengthen economic management.
The agreement was signed on Friday, September 18, 2026, at the CBN headquarters in Abuja by CBN Governor, Olayemi Cardoso, and Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
The MoU formalises what has been an ad-hoc relationship into a permanent, institutional framework for regular consultations, information sharing and joint policy assessments. It covers critical areas including government cash management, debt issuance planning, liquidity forecasting, macroeconomic analysis and periodic policy consultations.
By bringing fiscal and monetary policies into closer alignment, the partnership aims to support price stability, sustainable economic growth, financial system resilience and enhanced investor confidence.
Speaking at the signing, Cardoso said the deal does not create a new relationship, noting that both institutions have collaborated for decades on inflation management, debt sustainability and exchange rate stability. What distinguishes it, he said, is institutionalisation.
“What distinguishes today’s event is the formal institutionalisation of that collaboration,” Cardoso said. “It transforms a relationship built on practice into one anchored by clear processes and enduring institutional commitments.”
He noted that the timing is particularly significant as the CBN advances its transition towards an inflation-targeting framework, whose success globally rests not only on monetary policy but also on a supportive fiscal environment. 3b15
In his remarks, Oyedele emphasised that strong economies are built on institutions, not personalities.
“Strong economies are not built around strong personalities. They are built around strong institutions,” he said. “Independent institutions do not have to operate in isolation. Our mandates are distinct, but our outcomes are interconnected.”
Oyedele explained that government borrowing affects liquidity and interest rates, while monetary policy affects government’s financing costs, noting: “Nigeria has one economy. Fiscal policy cannot succeed without price stability; monetary policy cannot deliver price stability if fiscal policy pulls in the opposite direction.”
He added that the framework will also consider the economic effects of insecurity and illicit financial flows, and will be supported by stronger data systems, including partnership with the National Bureau of Statistics to track producer prices and productivity to identify inflation early.
The MoU safeguards the CBN’s operational independence as provided under the CBN Act, while leveraging existing coordination mechanisms like the Economic Management Team and National Economic Council.
The agreement comes amid signs of improving confidence, with the Finance Ministry citing a balance of payments surplus of over $5 billion in 2025 and external reserves of over $54 billion, rising non-oil exports, and Nigeria’s return to Frontier Market status and inclusion in JPMorgan’s frontier local-currency bond index.
