The Central Bank of Nigeria (CBN) has reaffirmed its commitment to deepening engagement with the academic and research community as the country progresses toward a fully-fledged Inflation Targeting (IT) monetary policy regime. The commitment was articulated by Deputy Governor in charge of Economic Policy, Dr Muhammad Abdullahi, during a strategic session with the Nigerian Economic Society (NES) and the academic community in Abuja, which the bank described as timely and essential to Nigeria’s ongoing economic reform programme.
Abdullahi addressed a gathering of scholars, directors, and policy experts as part of a sensitisation programme designed to build understanding and support for the transition to an inflation-targeting framework. He described the shift as a significant move toward a transparent, forward-looking, and rules-based monetary policy system anchored in long-term price stability. According to him, inflation targeting will serve as a crucial nominal anchor for the Nigerian economy, guiding market expectations and reducing the impact of supply-side shocks while improving transparency, accountability, and the overall credibility of monetary policy.
The deputy governor explained that stabilising inflation expectations would help lower risk premia, support long-term investment plans, and enable policymakers to look beyond short-term disruptions. With global uncertainties, including geopolitical tensions and volatile energy prices, placing sustained pressure on emerging economies, he argued that a credible monetary anchor is essential to bolstering Nigeria’s resilience. He highlighted several reforms already implemented to support the transition, including the return to orthodox monetary policy tools, withdrawal from quasi-fiscal activities, and the strengthening of institutional independence.
Major foreign exchange market reforms, including rate unification and the deployment of electronic trading platforms, have reduced volatility and improved price discovery, Abdullahi said. Additional measures such as bank recapitalisation, improved prudential oversight, and enhanced policy coordination with the fiscal authority have further stabilised the financial sector and increased coherence across monetary operations. These reforms, he noted, are already yielding measurable outcomes, with headline inflation declining sharply from 34.8 per cent in late 2024 to 15.1 per cent by early 2026, driven by sustained monetary tightening and improved policy discipline.
Abdullahi stated that Nigeria is firmly on track to achieve low and stable inflation, with a medium-term target of steering inflation into a single-digit range of 6 to 9 per cent, barring major external shocks. Achieving this, he said, will require sustained policy discipline, anchored expectations, and a credible institutional framework trusted by markets.
Also speaking, Dr Victor Oboh, Director of the Monetary Policy Department at the CBN, reaffirmed the bank’s commitment to strengthening collaboration with the NES as part of efforts to enhance monetary policy effectiveness and deepen macroeconomic stability. He noted that the success of any monetary framework, especially inflation targeting, depends not only on technical capacity but also on public trust and effective communication. Academics, researchers, and thought leaders, he said, play a vital role in shaping narratives, influencing expectations, and building the evidence base for sound policy decisions.
Oboh acknowledged potential challenges, including short-term trade-offs and the need to reinforce institutional credibility, but expressed confidence that the combined expertise of the CBN and NES would significantly advance Nigeria’s monetary policy goals. The President and Chairman of the Council of the NES, Dr Baba Musa, praised the CBN for what he described as a bold and reform-minded approach to monetary and financial sector management, commending the apex bank for its openness, policy direction, and willingness to collaborate with the academic community. “Nigeria needs a credible Central Bank, and the Nigerian Economic Society needs a Central Bank worth standing with,” he said.
