CBN: More work needed to boost macroeconomy, living standard

BY BONNY AMADI

The Central Bank of Nigeria (CBN) has assured that irrespective of the process recorded by the ministry of finance and the apex bank in stabilizing the Nigerian economy, and recording significant growth, more work needed to be done to lift macroeconomic indices and enhance the living standard of citizens.

This assurance was given at the 2025 Finance Correspondents and Editors workshop in Lagos, even as the apex bank expressed the need for sustained collaboration with all the stakeholders and the media to ensure that government policies are and impacts are well assimilated by the citizenry.

In keynote address, Deputy Governor, Central Bank of Nigeria, Ms. Emem Usoro at the 37th Seminar for Finance Correspondents and Business Editors, said that commitment of the ministry and the CBN, Inflation has declined to 16.05%, the exchange rate has stabilised below N1,500/$ with minimal volatility, and external reserves now exceed $46 billion, providing over 10 months of import cover. Monetary policy adjustments are supporting lower lending rates as inflation continues to ease.

According to the CBN Deputy Governor, these achievements reflect the commitment of the Central Bank of Nigeria under the leader- ship of Governor Olayemi Cardoso and his team, and underscores the importance of the media in communicating the benefits and progress of reforms to the public. Effective communication strengthens public understanding and supports successful policy outcomes.

Emphasising that even as progress has been made, “more work is required to improve macroeconomic fundamentals and the standard of living for Nigerians. This makes partnerships among policymakers, regulators, and the media even more important”.

Such work will ensure that the monetary and fiscal policies are aligned, adding “Aligning fiscal and monetary policies is essential to strengthening the financial system, enhancing regulation, and ensuring resilience, especially as technological innovation and digital finance continue to expand”.

In his paper titled, “The Strategic Framework and Specific Policy Actions Required to Align Nigeria’s Monetary and Fiscal Policies to Achieve a Robust, Shock-Resilient, And Efficient Financial System” Prof. Ken Ife Development Economist; Lead Consultant, ECOWAS Commission and President, Institute of Professional Economists and Policy Management, said that Nigerian monetary and fiscal policies have been tied to attaining key performance indices, a trend which he said need to be sustained and even surpassed.

Key Performance Indicators (KPIs) of a Robust System that aligns monetary policy with fiscal policy, he said should be a key focus, include, inflation Targeting to achieve a sustained single-digit inflation rate (e.g., below 10%).

Credit to Private Sector (CPS) Growth to increase the growth rate of credit directed towards the productive private sector (as a percentage of total credit) relative to government borrowing, as well as Financial Depthm which has to do with increasing the ratio of M2 (broad money supply) to GDP, indicating the financial system’s ability to intermediate and mobilize savings effectively.

Also, he said that focus should also be on the Exchange Rate Volatility Index, to maintain a low volatility index for the Naira, demonstrating predictability and reducing speculative activity, including USD dollarisation.

Non-Performing Loan (NPL) Ratio and Capital Adequacy Ratio: Keep the NPL ratio of the banking sector below the prudential threshold of 5%, and Capital Adequacy Ratio around 15%, reflecting the health of bank balance sheets. Adding that “This alignment framework moves the Nigerian financial system from a position of chronic vulnerability to one defined by resilience, efficiency, and credibility”

Director, Monetary Policy Department, Central Bank of Nigeria said in his presentation that Nigeria’s macroeconomic landscape requires coordinated responses to address structural weaknesses.

And that effective alignment of monetary and fiscal policies is essential for stabilizing the economy and ensuring long-term financial system stability.

Maintaining that the CBN’s role in policy coordination remains to promote a resilient, sound and stable financial system to promote and sustain growth, adding that a well-aligned policy environment promotes a stronger, more stable financial system that supports investment and inclusive growth.