FG and CBN Sign Six-Point MoU to Tackle Inflation and Steady Fuel Prices
By Aboki Forex —
The Federal Ministry of Finance and the Central Bank of Nigeria have signed a Memorandum of Understanding covering six policy areas aimed at improving coordination between fiscal and monetary authorities. The agreement, released on Wednesday, September 23, targets inflation, fuel price stability, data sharing and government financing coordination between the two institutions.
The two bodies said the arrangement is meant to ensure fiscal and monetary policies work together more effectively in support of sustainable economic growth and price stability.
Consistent Forecasts and Clearer Data Sharing
Under the MoU, the Ministry of Finance and the CBN will work towards more consistent forecasts for inflation, gross domestic product growth, government revenue, liquidity, financing requirements and the external sector.
The institutions will also set up clearer mechanisms for sharing information and resolving areas where fiscal and monetary policies could work at cross-purposes.
The government plans to expand the availability of economic data, including a Producer Price Index, employment figures and productivity data. That work will be done with the National Bureau of Statistics to support the CBN's transition towards inflation targeting.
Spending Discipline and Cheaper Food, Energy, Logistics
On the fiscal side, the government will pursue disciplined spending alongside measures aimed at reducing food, energy and logistics costs. These include maintaining strategic grain reserves, supporting farmers, investing in rural roads and engaging state governments on road infrastructure.
The agreement also provides for continued strengthening of fiscal governance institutions, including the Fiscal Responsibility Commission, Bureau of Public Procurement, Nigeria Extractive Industries Transparency Initiative and the Office of the Auditor-General.
Fuel Prices Without Subsidies
The government will seek to maintain stability in fuel prices without reintroducing consumption subsidies that could distort the market. The MoU recognises tax exemptions and exchange-rate stability as measures that can help moderate pump prices.
On borrowing, the two institutions will strengthen coordination around government financing and cash management to reduce the risk of government borrowing crowding out private-sector credit.
The agreement follows earlier comments by the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, who defended Nigeria's petrol deregulation policy. Speaking on Channels Television, Lokpobiri said the country's average pump price of about N1,430 per litre remains below the N1,633 recorded in the United States.
For Nigerian businesses and consumers, the MoU is a coordination framework rather than an immediate price fix. Its value will show in how quickly the promised data, forecasting and borrowing controls translate into lower inflation and steadier pump prices.