Nigeria’s economic landscape took center stage once again as the Central Bank of Nigeria’s Monetary Policy Committee concluded its 303rd meeting, offering a blend of optimism, caution, and strategic continuity. The committee’s 12 members reviewed the health of the domestic economy, examined global headwinds, and assessed the transmission of past policy decisions. Their final position was to maintain policy consistency, strengthen the fight against inflation, and reinforce the fragile progress Nigeria has made in recent months.
The headline from the meeting was unmistakable: the Monetary Policy Rate remains at 27 percent. This decision reflects a careful balancing act. On one hand, inflation has begun to slow at a pace not seen in years. On the other, Nigeria is still navigating global uncertainties and residual domestic pressures that demand a steady, disciplined approach.
YOU CAN ALSO READ: Adesina and Oramah: Two Nigerian Titans Elevated AfDB and Afreximbank into Global Powerhouses
October’s inflation data was a major highlight. The rate fell to 16.05 percent, down from 18.02 percent in September, marking the seventh straight month of decline. For many observers, this reinforces that the Central Bank’s aggressive tightening, combined with improving macroeconomic stability, has started to produce measurable results. One analyst noted that inflation moving from the high double digits seen in previous years to just above 16 percent is evidence that the bank’s interventions are working and that the committee wants these measures to keep taking effect without any policy shock.
Even more encouraging is the broad-based nature of the disinflation. Food inflation, long the most stubborn component due to supply disruptions and insecurity, dropped significantly to 13.12 percent. Experts credit this to better domestic food supply, a more stable exchange rate environment, and favorable seasonal factors. Core inflation, which excludes volatile items, also declined meaningfully, driven largely by lower prices for household goods and essential services.
The committee’s confidence in the direction of the Nigerian economy was further supported by recent growth data. Real GDP rose by 4.23 percent in the second quarter of 2025, outperforming the previous quarter’s growth of 3.13 percent. Manufacturing activity, tracked through the Purchasing Managers Index, surged to 56.4 points in November, the highest level in five years. Manufacturers cited improved access to inputs, better foreign exchange liquidity, and more stable consumer demand as driving forces behind the expansion. For a sector that has been strained by high production costs and supply bottlenecks, this is viewed as a critical turning point.
Nigeria’s external reserves also provided a source of confidence. The reserves climbed to 46.70 billion dollars by mid November, up by more than nine percent from late September. This increase strengthens Nigeria’s ability to manage external shocks and provides significant foreign exchange stability. With this reserve level, the country now holds the equivalent of more than ten months of import cover. Improved reserve levels are already contributing to stability in the foreign exchange market, where previous volatility has moderated substantially.
The committee also emphasized Nigeria’s regained credibility in global financial circles. The upgrades to the country’s sovereign credit rating by major rating agencies, combined with the Financial Action Task Force’s decision to remove Nigeria from its grey list, mark important progress. Investors have responded positively, with an uptick in capital inflows and renewed interest from global institutions. Financial analysts note that removal from the FATF grey list signals transparency and compliance improvements, which boost investor confidence.
Nigeria’s banking system remains a strong pillar of resilience. Financial Soundness Indicators have held firm across key areas including liquidity, asset quality, and capital adequacy. Sixteen banks have already met the revised capital thresholds set under the ongoing recapitalization program. Analysts believe this positions the financial sector for stronger lending growth and improved capacity to support Nigeria’s expanding economy. The committee encouraged the Central Bank to ensure that the recapitalization program continues smoothly.
While domestic indicators are improving, the committee remained attentive to global economic conditions. The global environment is showing gradual recovery, supported by easing geopolitical tensions, synchronized monetary policy in advanced economies, and improving supply chains. However, risks remain. Rising protectionism, geopolitical fragmentation, and renewed tensions between major economies could influence global financial markets and spill over into emerging economies such as Nigeria.
YOU CAN ALSO READ: Beyond the Hustle: Fate Foundation Charts Path for Policymakers to Unlock Nigeria’s $1 Trillion Economy
Looking ahead, the committee expects inflation to continue its downward trend. This expectation is supported by the lagged effects of earlier policy tightening, which typically take time to filter through the economy. In addition, the ongoing harvest season is expected to enhance food supply and contribute further to price moderation. Economists argue that consistency in policy direction is crucial at this stage, and the committee’s decision signals a deliberate attempt to maintain stability and avoid abrupt shifts that could derail recent progress.
Despite the progress recorded, the committee acknowledged that inflation remains above desired levels. Nonetheless, the overall tone of the meeting was measured, confident, and forward looking, suggesting that Nigeria is gradually entering a phase of more stable macroeconomic conditions. Market participants and policymakers alike will now turn their attention to the next meeting, scheduled for February 23 and 24, 2026, as Nigeria continues its effort to tackle inflation, stabilize the economy, and strengthen the financial system.
