CBN Targets Single-Digit Inflation as Inflation Targeting Gathers Momentum
By Patience Ikpeme
The Central Bank of Nigeria (CBN) has said Nigeria is making steady progress toward adopting a full inflation-targeting monetary policy framework, describing the move as a major step toward achieving long-term price stability and strengthening confidence in the economy.
Speaking at a strategic session with the Nigerian Economic Society (NES) and members of the academic community on March 18, 2026, the Deputy Governor in charge of Economic Policy, Muhammad Sani Abdullahi, said the transition represents a shift to a more transparent, forward-looking and rules-based approach to managing monetary policy.
Addressing participants at the session, Abdullahi explained that inflation targeting would serve as a strong guide for the Nigerian economy by helping to keep prices stable and reduce uncertainty for businesses and investors.
He said, “By guiding market expectations and reducing the impact of supply-side shocks, the framework improves transparency, accountability, and the overall credibility of monetary policy.”
Looking ahead, the Deputy Governor said Nigeria is on track to achieve low and stable inflation, with a medium-term target of bringing it down to between six and nine per cent, provided there are no major external shocks.
He noted that achieving this goal will depend on consistent policy discipline, stable expectations and strong institutions that can earn the trust of investors and the public.
Abdullahi said the central bank has already taken important steps to support the transition. According to him, the CBN has returned to conventional monetary policy tools, ended direct intervention lending practices and strengthened its institutional independence.
He added that reforms in the foreign exchange market, including the unification of exchange rates and the introduction of electronic trading platforms, have helped reduce volatility and improve how prices are determined in the market.
The Deputy Governor also said measures such as bank recapitalisation and stronger supervision have helped stabilise the financial sector, while better coordination between monetary and fiscal authorities has improved policy alignment.
He explained that these combined efforts are beginning to show results, noting that inflation has dropped sharply from 34.8 per cent in late 2024 to about 15.1 per cent by early 2026.
“Stabilising inflation expectations would help lower risk premia, support long-term investment plans, and enable policymakers to look beyond short-term disruptions,” he said.
Abdullahi added that global uncertainties, including geopolitical tensions and unstable energy prices, continue to affect emerging economies, making it necessary for Nigeria to have a credible and reliable monetary policy framework.
He thanked participants for their continued support and expressed hope for more collaboration between policymakers and the academic community.
In his opening remarks, the Director of the Monetary Policy Department at the CBN, Victor Oboh, said the bank remains committed to strengthening its relationship with the NES to improve the effectiveness of monetary policy and support economic stability.
Oboh said the success of inflation targeting depends not only on technical expertise but also on public trust and clear communication. He noted that academics and researchers play an important role in shaping public understanding and supporting evidence-based policy decisions.
While acknowledging that the transition may come with challenges, including short-term adjustments and the need to strengthen institutional credibility, he expressed confidence that cooperation between the CBN and the academic community will help Nigeria achieve its monetary policy objectives.
Delivering his keynote address, the President and Chairman of Council of the NES, Baba Yusuf Musa, praised the central bank for adopting what he described as a bold and reform-driven approach to managing the economy.
Musa, who is also the Director General of the West African Institute for Financial and Economic Management, said the NES is ready to support the CBN’s efforts to stabilise the economy and build a stronger financial system.
“Nigeria needs a credible Central Bank, and the Nigerian Economic Society needs a Central Bank worth standing with,” he said, adding that the Society is willing to work closely with the apex bank in shaping Nigeria’s economic future.
Participants at the session, drawn from universities and other institutions across the country, also commended the CBN’s reform efforts, especially the move toward inflation targeting, and pledged their support through research and policy engagement.
The meeting featured detailed discussions on Nigeria’s transition to the new monetary policy framework, with many participants agreeing that stronger collaboration between the central bank and the academic community will play a key role in achieving stable prices and sustainable economic growth.
