Edun Signals Interest Rate Cuts if Inflation Keeps Cooling

By Adedapo Adesanya

The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, has said there may be cuts in the interest rate if Nigeria’s inflation keeps cooling.

Mr Edun revealed this during an interview on the sidelines of the Abu Dhabi Sustainability Week, as reported by Bloomberg.

According to Mr Edun, a sustained decline in inflation would create room for additional rate cuts, helping to reduce borrowing costs and easing the government’s debt servicing burden.

Although the Minister has no control over interest rate decisions – a primary responsibility of the Central Bank of Nigeria (CBN), he said lower inflation and borrowing costs would free up revenue currently spent on servicing debt and improve the fiscal balance.

Mr Edun, according to Bloomberg, commended the apex bank for what he described as “excellent” progress in curbing inflation, attributing recent improvements to aggressive monetary tightening implemented over the past two years.

The CBN had more than doubled its policy rate from 2022 levels in a bid to rein in inflationary pressures, before implementing a 50 basis-point cut in September that brought the monetary policy rate to 27 per cent.

The move followed a sharp moderation in inflation from its late-2024 peak. As at November 2025, headline inflation rate eased to 14.45 per cent down from 16.05 per cent recorded in October. On a year-on-year basis, the headline inflation rate was 20.15 percentage points lower than the 34.60 per cent recorded in November 2024.

The Finance Minister also revealed that the government’s borrowing strategy would remain flexible and market-driven, with decisions on domestic and external issuances guided by pricing, timing, investor appetite, and adherence to debt limits outlined in the medium-term expenditure framework.

Mr Edun also said the Bola Tinubu-led administration is intensifying efforts to boost revenue mobilisation and reduce reliance on borrowing, particularly through structural reforms and improved efficiency in revenue collection.

He noted that the government is rolling out directives requiring ministries, departments, and agencies (MDAs) to halt cash collections and migrate fully to automated payment platforms to improve transparency and reduce leakages.

According to him, the federal government is also counting on privatisation proceeds, divestments by the Nigerian National Petroleum Company (NNPC), and increased crude oil production to support budget funding.