The Federal Government and the Central Bank of Nigeria (CBN) have signed a Memorandum of Understanding (MoU) to strengthen coordination between fiscal and monetary authorities and improve the country’s macroeconomic stability.
The agreement, signed by the Federal Ministry of Finance and the CBN, establishes a structured framework for regular consultation, information sharing and policy coordination between both institutions.
Speaking at the signing ceremony, the CBN Governor, Olayemi Cardoso said the agreement marked “a significant milestone in our nation’s pursuit of stronger macroeconomic management, lasting economic stability and sustainable prosperity for all Nigerians.”
He explained that the MoU would strengthen cooperation in key areas of economic management, including government cash management, debt issuance planning, liquidity forecasting, macroeconomic analysis and periodic policy consultations.
According to him, the agreement would transform the longstanding relationship between the two institutions into a more formal and structured arrangement.
“It transforms a relationship built on practice into one anchored by clear processes and enduring institutional commitment,” he said.
The CBN governor noted that fiscal and monetary policies were complementary tools for managing the economy, stressing that closer coordination could improve the effectiveness of economic policies.
“While fiscal policy influences economic activity through government expenditure, taxation and borrowing decisions, monetary policy promotes price stability and financial system soundness through the management of liquidity, interest rates and monetary conditions,” he said.
He added that the CBN and the Federal Ministry of Finance had collaborated for decades on issues including inflation management, debt sustainability, budget financing, exchange rate stability, economic reforms and responses to domestic and global economic shocks.
However, he mentioned the latest agreement was significant because it formally institutionalised that cooperation.
The CBN governor said the timing of the MoU was particularly important as the apex bank moves towards an inflation targeting framework, noting that the effectiveness of such a system depends partly on a supportive fiscal environment.
“The success of inflation targeting is known to rest not only on the effectiveness of monetary policy, but also on the existence of a supportive fiscal environment,” he said.
He said the agreement would also provide the foundation for developing an operational framework to guide its implementation, allowing both institutions to coordinate policy assessments, reduce potential policy conflicts and pursue shared economic objectives.
The CBN governor further stressed that closer collaboration between key economic institutions was essential at a time of global economic uncertainty, geopolitical tensions and financial market volatility.
“Today’s signing demonstrates Nigeria’s determination to strengthen its policy architecture and enhance the effectiveness of its economic management framework,” he said.
He expressed appreciation to the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, and the technical teams from both institutions for their roles in facilitating the agreement.
He reaffirmed the CBN’s commitment to sound monetary policy, macroeconomic stability, financial system resilience and sustainable economic growth.
“Today’s signing strengthens an enduring partnership and reinforces our shared commitment to work together in the national interest,” he said.
