CBN–Finance MoU Puts Government Borrowing Discipline to the Test
The Alliance for Economic Research and Ethics (AERE) has said the new Memorandum of Understanding between the Federal Government and the Central Bank of Nigeria (CBN) will be an important test of how effectively fiscal policy, government borrowing and monetary policy are coordinated.
The agreement, signed by the Finance Ministry and the CBN, is intended to strengthen policy consistency, information sharing, economic forecasting and the management of government financing and liquidity. AERE noted that its success will depend on whether these commitments translate into greater discipline and transparency in practice.
The Alliance also cautioned against assuming that the agreement directly led to the CBN’s recent reduction of the Monetary Policy Rate from 26.5% to 23%, stressing that timing alone does not prove a causal relationship.
According to AERE, attention should now turn to whether improved fiscal and monetary coordination leads to more transparent government financing, better liquidity management and improved access to credit for businesses, households and productive sectors of the economy. The organisation also called for a clear and regularly updated government financing calendar aligned with debt issuance and cash-management plans.
AERE maintained that the credibility of the new framework will ultimately be measured by visible changes in financing decisions and economic outcomes, rather than official statements alone.
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Alliance for Economic Research and Ethics (AERE)
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