As we navigate the complex and evolving economic landscape, the Central Bank of Nigeria’s commitment to improving communication, fostering dialogue, and collaborating on critical issues shaping monetary policy is more crucial than ever. The 2025 Monetary Policy Forum, themed “Managing the Disinflation Process,” provides a timely platform for rigorous intellectual discourse and evidence-based insights to enhance policy effectiveness.
The past year has presented significant challenges, including persistent inflationary pressures exacerbated by global and domestic shocks. Despite these headwinds, the CBN’s commitment to price and monetary stability has yielded measurable progress. Relative stability in the foreign exchange market, narrowing exchange rate disparities, and rising external reserves of over US$40 billion as of December 2024 are all testament to this progress.
However, recent data from the National Bureau of Statistics indicates that inflationary pressures persist, with headline inflation standing at 34.80 percent as of December 2024. Domestic structural challenges, exchange rate pass-through effects, and energy price adjustments continue to exert pressure on prices and economic activity.
To address these challenges, the CBN has implemented bold policy measures, including raising the Monetary Policy Rate (MPR) by a cumulative 875 basis points to 27.50 percent, increasing the Cash Reserve Ratio (CRR) of Other Depository Corporations (ODCs) by 1750 basis points to 50.00 percent, and adjusting the asymmetric corridor around the MPR.
These measures have contributed to a decline in inflationary pressures, with counterfactual estimates suggesting that without these interventions, inflation could have reached 42.81 percent by December 2024. The CBN’s commitment to ensuring price stability while minimizing adverse effects on growth and livelihoods is evident in these reforms.
Beyond monetary policy, CBN has undertaken critical reforms to strengthen the financial system and ensure macroeconomic stability. These reforms include; Unifying multiple exchange rate windows, which aims to reduce the complexity and uncertainty associated with multiple exchange rates, promoting a more stable and predictable foreign exchange market.
Clearing the backlog of foreign exchange commitments, this effort seeks to address the legacy issues that have contributed to the country’s foreign exchange challenges, promoting a more efficient and transparent market. Lifting restrictions on 41 items previously banned from access to the official FX market also aim to promote trade and economic growth by providing businesses with greater access to foreign exchange.
Introducing new minimum capital requirements for banks, which seeks to strengthen the banking sector, promoting financial stability and resilience. Launching the WIFI initiative under the National Financial Inclusion Strategy, this effort aims to promote financial inclusion, providing underserved populations with greater access to financial services.
The Nigeria Foreign Exchange Code, launched recently, marks a decisive step forward for integrity, fairness, transparency, and efficiency in the foreign exchange market. The CBN’s commitment to creating an enabling environment for inclusive economic development is evident in these reforms.
However, achieving macroeconomic stability requires sustained vigilance and a proactive monetary policy stance. The 2025 Monetary Policy Forum provides an opportunity to generate actionable insights and refine strategies for the road ahead.
As we shift from unorthodox to orthodox monetary policy, the CBN remains committed to restoring confidence, strengthening policy credibility, and staying focused on its core mandate of price stability. With foreign exchange liquidity improving, the naira gradually aligning with market fundamentals, and a more predictable environment for domestic production, exports, and essential imports, we are confident that those policies are setting Nigeria on the path to sustainable economic stability.
Collaboration is key to driving meaningful change. Policymakers, the private sector, and civil society must work together to achieve Nigeria’s economic goals. The 2025 Monetary Policy Forum provides a platform for such engagement, with all subject-matter experts, policymakers, scholars, and market economists to this critical discussion.
The Honorable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, recently outlined a roadmap towards ensuring Nigeria’s macroeconomic stability and growth at the 30th Nigeria Economic Summit. The minister stressed the necessity of immediate and comprehensive economic reforms, including fiscal reforms, efficient government spending, and targeted interventions to alleviate fuel price pressures.
As we navigate the path ahead, we are optimistic that with bold, coordinated policy measures and a commitment to collaboration, Nigeria can achieve sustainable economic stability and prosperity for all. The CBN remains committed to ensuring that monetary policy remains forward-looking, adaptive, and resilient.
Nigeria’s path to sustainable economic stability is complex and multifaceted. However, with the CBN’s commitment to price and monetary stability, bold policy measures, and critical reforms, we are confident that the country is on the right path. Collaboration, transparency, and a commitment to inclusive economic development will be crucial in achieving our economic goals.
