FG, CBN sign deal to tackle inflation, debt, forex

The Federal Government and the Central Bank of Nigeria have signed an agreement to coordinate policies on inflation, public debt, government borrowing, liquidity and foreign exchange management as the country moves towards a new inflation-targeting framework.

The Memorandum of Understanding on Fiscal-Monetary Policy Coordination, signed in Abuja on Friday, establishes a formal framework for the Federal Ministry of Finance and the CBN to align key economic decisions without compromising the apex bank’s independence.

The CBN Governor, Olayemi Cardoso, said the agreement would deepen cooperation in government cash management, debt issuance, liquidity forecasting, macroeconomic analysis and policy consultations.

“This Memorandum provides a structured framework for regular consultation, information exchange and policy coordination,” Cardoso said.

“It will strengthen collaboration in critical areas such as government cash management, debt issuance planning, liquidity forecasting, macroeconomic analysis and periodic policy consultations, thereby enhancing policy coherence and the effectiveness of economic management.”

The CBN governor said fiscal and monetary policies were complementary, as government expenditure, taxation and borrowing decisions affect economic activity, while monetary policy influences liquidity, interest rates and price stability.

According to him, the agreement is particularly significant as the CBN advances its transition towards an inflation-targeting framework.