Finance Ministry, CBN to Boost Fiscal-Monetary Policy Coordination

By Adedapo Adesanya

The federal government and the Central Bank of Nigeria (CBN) have signed a Memorandum of Understanding (MoU) to institutionalise coordination between fiscal and monetary authorities and strengthen Nigeria’s macroeconomic management.

The agreement was signed in Abuja on Friday by the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, and the Governor of the apex bank, Mr Yemi Cardoso.

The framework provides for regular consultations, information sharing and coordinated policy assessment between the Federal Ministry of Finance and the apex bank.

It formalises existing collaboration between both institutions on inflation management, debt sustainability, budget financing, exchange-rate stability, economic reforms and responses to domestic and global economic shocks.

Under the MoU, the ministry and CBN will strengthen coordination on government cash management, debt issuance planning, liquidity forecasting, macroeconomic analysis and periodic policy consultations.

The government said the arrangement is expected to improve the consistency of macroeconomic assumptions and forecasts, enhance policy coherence and reduce uncertainty in economic decision-making.

Speaking at the signing ceremony, Mr Oyedele said the agreement would ensure that fiscal and monetary coordination is based on clear structures, data and accountability rather than personalities.

“Independent institutions do not have to operate in isolation. Our mandates are distinct, but our outcomes are interconnected,” he said.

The minister stressed that the operational independence of the CBN remains protected under the new framework, describing institutional independence and policy coordination as complementary.

Mr Oyedele said the framework would also support Nigeria’s transition towards an inflation-targeting regime by improving the quality and timeliness of fiscal and monetary data, including information on government cash positions, financing plans, credit growth and foreign exchange flows.

He added that sustainable price stability requires a whole-of-government approach combining fiscal discipline, sound cash and liquidity management, efficient government financing and reforms addressing structural drivers of inflation such as food, energy, logistics and imported costs.

The minister also cited recent improvements in Nigeria’s external position, including a balance-of-payments surplus of more than $5 billion recorded in 2025 and foreign exchange reserves exceeding $54 billion.

He said the government’s focus was not only on short-term portfolio flows but on attracting patient capital to support investment, infrastructure, technology and job creation.

Mr Cardoso described the MoU as a significant milestone in efforts to strengthen macroeconomic management and achieve lasting economic stability.

He said the framework would transform the longstanding relationship between the two institutions into one anchored by clear processes and enduring commitments, while providing predictable mechanisms for engagement and improving their capacity to respond to emerging economic challenges.

The MoU reinforces the government’s stated commitment to fiscal discipline, stronger institutions, policy consistency and evidence-based economic decision-making.