Central Bank aims for inflation in single digits, notes significant decline starting from 2024

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The Central Bank of Nigeria has said it is on course to reduce inflation to single digits as it transitions to an inflation-targeting monetary policy framework.

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This was disclosed in a statement issued by the apex bank on Sunday following an engagement with the Nigerian Economic Society and members of the academic community in Abuja.

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Speaking at the session held on March 18, 2026, the CBN Deputy Governor in charge of Economic Policy, Dr Muhammad Abdullahi, said the shift to inflation targeting represents a major change in Nigeria’s monetary policy approach.

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He described the engagement as timely and essential to Nigeria’s ongoing economic reforms, adding that the new framework would strengthen policy credibility and long-term price stability.

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He said, “The transition to an inflation-targeting framework marks a significant shift toward a transparent, forward-looking, and rules-based monetary policy system anchored in long-term price stability.”

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Abdullahi said the framework would serve as a key anchor for the economy by shaping expectations and reducing the impact of external shocks.

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He noted that inflation targeting would serve as a crucial nominal anchor for the Nigerian economy, adding that stabilising inflation expectations would help lower risk premia and support long-term investments.

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

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The statement highlighted several reforms already implemented by the bank to support the transition, including a return to orthodox monetary policy tools and a gradual withdrawal from quasi-fiscal interventions.

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It added that foreign exchange market reforms, such as rate unification and the introduction of electronic trading platforms, have improved price discovery and reduced volatility.

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The apex bank also cited improvements in banking sector stability through recapitalisation efforts and stronger prudential oversight, alongside better coordination with fiscal authorities.

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According to Abdullahi, these measures are already producing results.

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“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 statement added.

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Looking ahead, the CBN said it is firmly on track to achieve low and stable inflation in the medium term.

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“The medium-term target is to steer inflation into a single-digit range of 6–9 per cent, barring major external shocks,” the statement read.

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Abdullahi further noted that achieving this target would depend on sustained policy discipline, well-anchored expectations, and strong institutional credibility.

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Earlier, the Director of the Monetary Policy Department, Dr Victor Oboh, said collaboration with the academic community is critical to improving monetary policy effectiveness.

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He noted that the success of inflation targeting depends not only on technical design but also on public trust and communication.

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Oboh noted that academics, researchers, and thought leaders play a vital role in shaping narratives, influencing expectations, and building the evidence base for sound policy decisions.

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In his remarks, the President of the Nigerian Economic Society, Dr Baba Yusuf Musa, commended the CBN’s reform direction and pledged continued support for its stabilisation efforts.

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“Nigeria needs a credible Central Bank, and the Nigerian Economic Society needs a Central Bank worth standing with,” he said.

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Participants at the session, drawn from universities and policy institutions, also expressed support for the bank’s transition to inflation targeting, describing it as a necessary step toward strengthening macroeconomic stability.

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Nigeria’s headline inflation rate eased marginally to 15.06 per cent in February 2026, according to the Consumer Price Index report released by the National Bureau of Statistics.

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