On Friday, the Federal Government and the Central Bank of Nigeria (CBN) signed a Memorandum of Understanding (MoU) in Abuja to formalise coordination between fiscal and monetary policies.
The agreement, signed by the Federal Ministry of Finance and the CBN, establishes a structured framework for regular consultation, information exchange and joint policy coordination. It aims to strengthen cooperation in areas such as government cash management, debt issuance planning, liquidity forecasting, macro‑economic analysis and periodic policy consultations.
“The MoU does not create a new relationship between the CBN and the Ministry of Finance, which have worked together for decades, but to formally institutionalise the longstanding collaboration and economic reforms,” said CBN Governor Olayemi Cardoso at the signing ceremony. “Fiscal and monetary policies are complementary instruments for managing a modern economy…The timing of the agreement is particularly important as the apex bank advances its transition towards an inflation‑targeting framework.”
Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele emphasised that the MoU is designed to institutionalise coordination rather than make it dependent on individual personalities. He said the government’s objective is to bring inflation sustainably into single digits, noting that fiscal policy must contribute through discipline, disinflationary spending, sound cash and liquidity management and efficient financing that does not crowd out the private sector.
“This is independence with coordination. The operational independence of the central bank remains sacrosanct,” Oyedele said. “Better coordination starts with a common evidence base.”
The minister highlighted structural inflationary pressures in food, energy and logistics, and outlined measures to strengthen agricultural productivity, including better seeds, irrigation, grain reserves and improved roads for moving farm produce to markets. He also said the government is working with the National Bureau of Statistics to provide timely, comprehensive data for policy decisions, such as producer price information alongside the Consumer Price Index, and to improve the sharing of fiscal and monetary data covering cash positions, financing plans, credit growth and foreign exchange flows.
<small>Source: The Sun Nigeria — read the original story there.</small>
