The International Monetary Fund (IMF) has praised the Central Bank of Nigeria (CBN) for stabilising the economy while urging it to strengthen policy tools ahead of a full transition to inflation targeting.
Speaking at the 20th Anniversary of the CBN’s Monetary Policy Department (MPD) on Tuesday, Christian Ebeke, IMF Resident Representative for Nigeria, said the central bank had made “a huge, huge turnaround compared to the past few months or years.”
Describing Nigeria’s monetary evolution as a “clear case of the natural experiment,” he noted that the country had learned hard lessons from earlier missteps, including a bloated foreign exchange backlog, high inflation, and depleted reserves. “How on earth can he (Cardoso) remain so calm and hopeful at the same time, when we were in a situation of trying to clear effects backlog?” Ebeke recalled of his first meeting with Governor Olayemi Cardoso in October 2023.
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The colloquium, themed ‘Monetary Policy in Nigeria: Past, Present and Future,’ reviewed the CBN MPD’s two-decade journey, assessed current dynamics shaping monetary policy, and explored future challenges and opportunities.
Ebeke said the central bank had turned a corner in its policy approach, noting a brighter future ahead. “They’re no longer looking at these challenges. They now see a brighter future, and that’s what they are able to reflect of the past, the present and future,” he said, highlighting the stark departure from the turbulence of recent years.
The IMF official pointed to tangible gains, including inflation easing to 16.05%. “It doesn’t mean that prices are falling across the board, but it means that there are forces that are now pushing the pace of pricing down. FX market rebounded, and there is trust,” he said, reflecting growing credibility in the central bank’s policies.
He stressed, however, that the transition to inflation targeting requires refining key transmission channels, including the exchange rate and interest rate mechanisms, to fully anchor inflation expectations. “Inflation targeting as just a word doesn’t matter…the channel does not work very well so far,” Ebeke said.
In his remarks, Olayemi Cardoso, governor of the CBN, outlined the MPD’s two-decade contribution to Nigeria’s monetary framework. He highlighted landmark achievements such as the adoption of the Monetary Policy Rate (MPR) in 2006, the Interest Rate Corridor Approach, and enhanced policy communication that underpins investor confidence.
Represented by Muhammad Sani Abdullahi, CBN Deputy Governor, Economic Policy, Cardoso noted that inflation had moderated to 16.05% as of October 2025 from a peak of 34.6% in November 2024, marking seven consecutive months of disinflation.
“All the three top international ratings agencies upgrade Nigeria, with the latest by S&P Global Ratings, which revised our sovereign outlook from stable to positive,” he said.
Pointing to gains in foreign reserves and currency stability, he noted that the naira had strengthened while the spread between official and Bureau de Change rates fell below 2%, and reserves rose to $46.7 billion, providing 10.3 months of import cover. These improvements, he said, reflect restored investor confidence and renewed foreign portfolio inflows.
Cardoso urged continued innovation and capacity building within the MPD to ensure the bank remains agile in responding to macroeconomic shocks. He emphasised the significance of transitioning to a full inflation-targeting regime, describing it as “not merely a technical adjustment; it is a strategic imperative for anchoring expectations and sustaining price stability.”
In his welcome address, Victor Oboh, Director of the Monetary Policy Department, traced the department’s evolution from its early analytical team to a “strategic nerve center of the bank’s policy architecture.”
He highlighted its five specialised divisions—Macroeconomic Analysis, Monetary Policy, Committee Coordination, International Economic Relations, and Policy Research—supporting top management and producing experts who have served as advisors and directors to successive governors.
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Oboh credited the MPD with guiding Nigeria’s transition from direct controls to a market-based monetary policy regime, including adopting a hybrid framework bridging monetary targeting with inflation targeting.
He noted that disciplined policy actions had moderated inflation, stabilised the foreign exchange market, narrowed exchange rate disparities, and raised external reserves above $46 billion as of November 14, 2025.
“Your dedication has ensured that monetary policy remains a cornerstone of macroeconomic stability in Nigeria,” Oboh said, commending the department’s two decades of service while urging continued innovation and agility to navigate emerging economic and technological challenges.
