Finance Ministry, CBN Sign MoU to Strengthen Fiscal-Monetary Policy Coordination

The Federal Ministry of Finance 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 framework.

The agreement, signed in Abuja on Friday, September 18, 2026, seeks to replace largely relationship-driven coordination between the Ministry and the apex bank with a more structured framework anchored on existing institutions and statutory provisions.

Under the agreement, both institutions will strengthen data-sharing, align macroeconomic assumptions and forecasts, and establish mechanisms for resolving potential conflicts between fiscal and monetary policy measures.

The MoU builds on existing coordination platforms, including the Economic Management Team and the National Economic Council, as well as statutory linkages between the Ministry of Finance and the CBN under the Central Bank of Nigeria Act.

Speaking at the signing, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the agreement was significant because it strengthened institutions rather than relying on individual personalities.

“Our mandates are distinct, but our outcomes are interconnected. Strong economies are not built around strong personalities. They are built around strong institutions,” Oyedele said.

CBN Governor, Olayemi Cardoso, said the agreement demonstrated Nigeria’s commitment to strengthening its economic policy architecture and improving the effectiveness of economic management.

He said stronger institutional collaboration would contribute to economic stability, investor confidence and improved policy outcomes.

A major component of the agreement is the alignment of macroeconomic assumptions and forecasts covering inflation, gross domestic product growth, government revenue, liquidity, financing requirements and the external sector.

The two institutions are also expected to establish stronger and more structured information-sharing mechanisms to minimise situations where fiscal and monetary actions could work at cross-purposes.

The agreement further provides for a coordinated government-wide approach to tackling inflation, combining disciplined fiscal spending with measures aimed at reducing food, energy and logistics costs.

Such measures include the use of strategic grain reserves, support for farmers, rural road investments and engagement with state governments on road levies and infrastructure providing access to farms.

The Federal Government and the CBN also reaffirmed measures aimed at maintaining fuel price stability without returning to what they described as distortionary consumption subsidies.

The framework also envisages the production of expanded economic data, including a Producer Price Index as well as improved employment and productivity statistics, in collaboration with the National Bureau of Statistics.

According to the agreement, improved data availability will support the CBN’s transition towards an inflation-targeting framework.

The Ministry of Finance and the CBN will also coordinate government financing and cash management more closely to reduce the risk of government borrowing crowding out private-sector credit.

The agreement further emphasises the continued strengthening of fiscal governance institutions, including the Fiscal Responsibility Commission, Bureau of Public Procurement, Nigeria Extractive Industries Transparency Initiative and the Office of the Auditor-General of the Federation.

The government said the new framework comes against the backdrop of improvements in Nigeria’s external position.

According to the statement, Nigeria recorded an overall balance-of-payments surplus of more than $5 billion in 2025, while external reserves had risen above $55 billion as of September 2026.

The government also said that non-oil exports outpaced oil exports in the third quarter of 2026 for the first time, while imports of refined petroleum products declined amid increased domestic refining capacity.

It added that FTSE Russell had confirmed Nigeria’s return from Unclassified to Frontier Market status, effective September 21, 2026, citing improvements in foreign-exchange liquidity, capital repatriation and market accessibility.

The government further noted that JPMorgan had announced Nigeria’s inclusion in its new frontier local-currency government bond index.

Oyedele said the developments underscored the importance of consistency and certainty in economic policymaking.

“Capital follows trust before returns,” the minister said, stressing that policy consistency, certainty and clarity remained central to the work of both institutions.

The MoU was signed by Oyedele on behalf of the Federal Ministry of Finance and Cardoso on behalf of the Central Bank of Nigeria.