The Alliance for Economic Research and Ethics Ltd/Gte has called on Nigeria’s Federal Government and the Central Bank of Nigeria (CBN) to turn recent macro‑policy gains into real improvements for ordinary citizens, following the September 18, 2026 Memorandum of Understanding that aligns fiscal and monetary policy.
In a report titled “The Wedding of the Two Elephants: Why Nigeria’s Fiscal‑Monetary Truce Must Now Marry Growth to Development,” the Alliance praised the agreement for synchronising macroeconomic assumptions, enhancing information sharing, coordinating government financing and cash management, and working jointly on inflation while preserving the CBN’s operational independence. It described the MoU as a “significant shift from the longstanding disconnect between fiscal and monetary policy authorities.”
Despite the progress, the Alliance warned that coordination alone will not lift living standards unless it translates growth into poverty reduction, job creation and better access to basic services. It cited a 4.43 % year‑on‑year GDP growth in Q2 2026 and 3.87 % in 2025, but noted that real GDP per capita rose only 1.9 % in 2025. The 2022 National Multidimensional Poverty Index recorded 62.9 % of Nigerians—132.92 million people—as multidimensionally poor, while the World Bank projected that 52.5 % would live below its international poverty line in 2025. The report also highlighted a fall in annual‑average inflation from 33.2 % in 2024 to an estimated 23 % in 2025, international reserves of $45.5 billion at the end of 2025, and Nigeria’s return to FTSE Russell Frontier Market status on September 21, 2026.
High borrowing costs remain a major constraint. Federal Government interest payments accounted for an estimated 53.2 % of revenue in 2025, up from 40.8 % in 2024. Banks held government securities worth 22 % of their total assets, a concentration that could limit credit available to private businesses.
To ensure that fiscal and monetary coordination benefits the poorest, the Alliance proposed a “Poverty Governor” that would attach estimates of impact on the bottom 40 % of the population to major policy decisions. It also called for a legally backed plan to reduce government interest payments to below 30 % of revenue by 2028, with the savings redirected toward food systems, rural roads and primary healthcare. The group urged measures to encourage banks to increase private‑sector lending and to reduce the excessive concentration of bank assets in government securities.
On inflation, the Alliance urged the government and CBN to complement monetary policy with supply‑side measures targeting food, energy and transportation costs. Recommendations included strategic grain reserves, improved security along agricultural corridors and logistics reforms to lower the cost of transporting food from farms to markets. It also urged the institutionalisation of the fiscal‑monetary coordination framework to survive changes in political leadership and election cycles, and for clearer public communication of the poverty impact of major economic policies.
“Growth is a means. Development — human, shared, visible — is the destination,” the Alliance said.
<small>Source: Vanguard News — read the original story there.</small>
