The Central Bank of Nigeria (CBN) has set a medium-term inflation target of 6–9 per cent as it accelerates its transition to a full inflation-targeting monetary policy framework, while cautioning that global shocks could still disrupt progress.
This position was outlined in a statement by the apex bank following a strategic engagement with the Nigerian Economic Society (NES) and the academic community held on March 18, 2026, where the CBN detailed its reform direction and macroeconomic outlook.
The Deputy Governor in charge of Economic Policy, Dr Muhammad Sani Abdullahi, said the shift to inflation targeting represents a move toward a more transparent and rules-based policy regime anchored on price stability.
What the statement is saying
The statement read, “Dr Abdullahi stated that Nigeria is firmly on track to achieve low and stable inflation. The medium-term target is to steer inflation into a single-digit range of 6–9 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.”
Abdullahi noted that the inflation targeting framework is expected to guide market expectations and improve the credibility of monetary policy, adding that “stabilising inflation expectations would help lower risk premia, support long-term investment plans, and enable policymakers to look beyond short-term disruptions.”
He, however, warned that external pressures remain a key risk, pointing to “global uncertainties, including geopolitical tensions and volatile energy prices” as factors that continue to weigh on emerging economies like Nigeria.
Inflation decline signals early reform gains
The CBN said recent policy adjustments are already producing measurable outcomes, with headline inflation moderating significantly from 34.8 per cent in late 2024 to 15.1 per cent by early 2026.
According to Abdullahi, the disinflation trend has been driven by sustained monetary tightening and improved policy discipline, supported by structural reforms within the Bank.
He explained that inflation targeting would serve as a “crucial nominal anchor” for the economy, improving transparency, accountability, and overall policy effectiveness.
- “Achieving low and stable inflation will require sustained policy discipline, anchored expectations, and a credible institutional framework trusted by markets,” the statement noted that Abdullahi said, adding that Nigeria is firmly on track to reach single-digit inflation barring major shocks.
FX reforms, policy shift underpin transition
The apex bank highlighted a series of reforms implemented to support the transition, including a return to orthodox monetary policy tools and a withdrawal from quasi-fiscal interventions.
It also pointed to major foreign exchange reforms such as rate unification and the introduction of electronic trading platforms, which it said have improved price discovery and reduced volatility in the FX market.
Additional measures such as bank recapitalisation efforts and tighter prudential oversight were cited as contributing to financial system stability, alongside improved coordination between monetary and fiscal authorities.
CBN seeks stronger academic collaboration
The Director of the Monetary Policy Department, Dr Victor Oboh, stressed that the effectiveness of inflation targeting depends not only on technical design but also on public trust and communication.
He noted that academics and researchers play a critical role in shaping expectations and strengthening the evidence base for policy decisions.
- “The success of any monetary framework, especially inflation targeting, depends not only on technical capacity but also on public trust and effective communication,” the statement read.
On his part, the President of the Nigerian Economic Society, Dr Baba Yusuf Musa, commended the CBN’s reform approach, describing it as bold and necessary for long-term macroeconomic stability.
- “Nigeria needs a credible Central Bank, and the Nigerian Economic Society needs a Central Bank worth standing with,” he said, pledging continued collaboration with the apex bank.
The engagement, which featured detailed presentations on Nigeria’s transition to inflation targeting, drew participants from universities and policy institutions, many of whom endorsed the CBN’s reform direction and commitment to price stability.
