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 warning that global shocks could still disrupt progress.
The apex bank disclosed this in a statement issued following a strategic engagement with the Nigerian Economic Society (NES) and members of the academic community on March 18, 2026, during which it outlined its reform agenda and macroeconomic outlook.
Deputy Governor in charge of Economic Policy, Dr Muhammad Sani Abdullahi, stated that the shift to inflation targeting signifies a move toward a more transparent and rules-based policy regime, anchored in price stability.
According to the statement, Abdullahi noted that Nigeria is “firmly on track to achieve low and stable inflation,” with the medium-term goal of bringing inflation into a single-digit range of 6–9 per cent, barring major external shocks.
He emphasised that achieving this target would require sustained policy discipline, well-anchored expectations, and a credible institutional framework that commands market confidence.
Abdullahi added that the inflation-targeting framework is expected to guide market expectations and strengthen the credibility of monetary policy, noting that stabilising inflation expectations would help lower risk premia, support long-term investment decisions, and enable policymakers to look beyond short-term disruptions.
However, he cautioned that external pressures remain a key risk, citing global uncertainties, geopolitical tensions, and volatile energy prices as persistent threats to emerging economies, such as Nigeria.
The CBN noted that recent policy measures are already yielding results, with headline inflation moderating from 34.8 per cent in late 2024 to 15.1 per cent by early 2026.
The disinflation trend, Abdullahi said, has been driven by sustained monetary tightening, improved policy discipline, and ongoing structural reforms within the Bank.
He described inflation targeting as a “crucial nominal anchor” that would enhance transparency, accountability, and overall policy effectiveness.
The apex bank also highlighted a range of reforms supporting the transition, including a return to orthodox monetary policy tools and a gradual withdrawal from quasi-fiscal interventions.
In the foreign exchange market, it pointed to reforms such as exchange rate unification and the introduction of electronic trading platforms, which have improved price discovery and reduced volatility.
Additional measures—including bank recapitalisation and tighter prudential oversight—were cited as strengthening financial system stability, alongside improved coordination between monetary and fiscal authorities.
Director of the Monetary Policy Department, Dr. Victor Oboh, stressed that the success of inflation targeting depends not only on technical design but also on public trust and effective communication.
He noted that academics and researchers have a vital role in shaping expectations and strengthening the evidence base for policy decisions.
Similarly, Dr Baba Yusuf Musa, President of the Nigerian Economic Society, commended the CBN’s reform efforts, describing them as bold and necessary for achieving 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, attracted participants from universities and policy institutions, many of whom endorsed the CBN’s reform direction and its commitment to achieving price stability.
