CBN Sets Course for Single-Digit Inflation

The Central Bank of Nigeria (CBN) says it is on track to reduce inflation to single digits as part of its transition to an inflation-targeting monetary policy framework.

In a statement issued Sunday after an engagement with the Nigerian Economic Society and academics in Abuja, CBN Deputy Governor for Economic Policy, Dr Muhammad Abdullahi, described the shift as “a significant change toward a transparent, forward-looking, and rules-based monetary policy system anchored in long-term price stability.”

He explained that inflation targeting would serve as a crucial anchor for the economy, shaping expectations, lowering risk premiums, and supporting long-term investments.

The CBN noted that global uncertainties, including geopolitical tensions and volatile energy prices, make a credible monetary anchor more urgent for emerging economies like Nigeria.

Reforms already implemented include a return to orthodox monetary tools, withdrawal from quasi-fiscal interventions, foreign exchange market unification, electronic trading platforms, and stronger banking sector oversight.

According to Abdullahi, these measures are yielding results: “Headline inflation declined 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.”

The bank’s medium-term target is to steer inflation into a 6–9% range, barring major external shocks. Success, Abdullahi said, will depend on policy discipline, anchored expectations, and institutional credibility.

Academics and economists at the session welcomed the move, with Dr Baba Yusuf Musa, President of the Nigerian Economic Society, pledging support: “Nigeria needs a credible Central Bank, and the Nigerian Economic Society needs a Central Bank worth standing with.”