The Central Bank of Nigeria has announced plans to reduce inflation to single digits as it transitions to an inflation-targeting monetary policy framework.
This was disclosed in a statement issued on Sunday following an engagement with the Nigerian Economic Society and members of the academic community in Abuja.
Speaking at the session held on March 18, 2026, the CBN Deputy Governor in charge of Economic Policy, Muhammad Abdullahi, described the shift as a significant turning point in Nigeria’s monetary policy approach. He noted that the framework would enhance transparency, strengthen policy credibility, and ensure long-term price stability.
According to the apex bank, the transition represents a move toward a more forward-looking and rules-based system anchored on stable prices. Abdullahi explained that inflation targeting would serve as a key anchor for the economy by shaping expectations and cushioning the impact of external shocks.
He added that stabilising inflation expectations would help reduce risk premiums and encourage long-term investment, especially amid global uncertainties such as geopolitical tensions and volatile energy prices.
The CBN also highlighted several reforms supporting the transition, including a return to orthodox monetary policy tools and a gradual withdrawal from quasi-fiscal interventions. Foreign exchange reforms—such as rate unification and the introduction of electronic trading platforms—have also improved price discovery and reduced market volatility.
In addition, the bank pointed to improvements in the stability of the banking sector through recapitalisation efforts and stronger regulatory oversight, alongside better coordination with fiscal authorities.
Abdullahi noted that these measures are already yielding results, with headline inflation dropping significantly from 34.8 per cent in late 2024 to 15.1 per cent in early 2026. Recent data from the National Bureau of Statistics showed that inflation further eased to 15.06 per cent in February 2026.
Looking ahead, the apex bank stated that it is on track to achieve a medium-term inflation target of 6–9 per cent, barring major external shocks. Abdullahi emphasised that achieving this goal would depend on sustained policy discipline, well-managed expectations, and strong institutional credibility.
Earlier, the Director of the Monetary Policy Department, Victor Oboh, stressed the importance of collaboration with academics in improving policy effectiveness. He noted that public trust and clear communication are critical to the success of inflation targeting.
Also speaking, the President of the Nigerian Economic Society, Baba Yusuf Musa, commended the CBN’s reform efforts and pledged continued support for its stabilisation agenda.
Participants at the session, drawn from universities and policy institutions, expressed strong backing for the policy shift, describing it as a necessary step toward strengthening Nigeria’s macroeconomic stability.
