At its February 2025 meeting, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) voted to retain all policy parameters, signaling a cautious but optimistic outlook on inflation moderation and economic stability.
The personal statements of the committee showed that the members, while acknowledging persistent inflationary pressures, noted encouraging signs of a gradual decline in inflation rates and improving macroeconomic fundamentals.
A member of the committee, Pauline Odinkemelu emphasised the importance of monitoring the domestic inflation outlook, projecting a gradual decline due to ongoing policy measures. While recognising the statistical adjustments from the rebased inflation rate, she maintained that inflation in Nigeria remains largely structural, driven by supply-side constraints. She called for continued collaboration between monetary and fiscal authorities to address these pressures effectively.
Noting the economic challenges of 2024, including high inflation and naira depreciation, Aloysius Ordu praised the MPC’s firm response through interest rate hikes, CRR adjustments, and foreign exchange market reforms.
He highlighted cautious improvements in business and household confidence, a strengthening naira, and increased foreign exchange reserves. While acknowledging the need for vigilance against sustained inflation, he supported maintaining current policy settings.
Another member, Bala Bello, pointed to the effectiveness of previous MPC policies in restoring macroeconomic stability, noting moderating inflation, naira stability, and positive GDP growth, particularly in the non-oil sector. He regarded the recent rebasing of the Consumer Price Index (CPI) as an enhancement to data credibility and decision-making. He emphasised that Nigeria’s inflation now results in positive real yields, boosting investor confidence.
Pointing out signs of economic stability and growth, Bandele Amoo focused noted that global inflation was moderating, albeit with downside risks from geopolitical tensions and trade network fragmentation.
Domestically, he acknowledged strong GDP growth, financial system resilience, and a stable balance of payments. He supported maintaining a tight monetary policy stance to ensure inflation trends downward sustainably.
On her part, Emem Usoro, underscored the importance of a stable policy environment given global uncertainties. She observed a slowed pace of inflation since the last MPC meeting, with rebased headline inflation standing at 24.48 per cent in January 2025.
Key inflation drivers included tight financial conditions, marginal exchange rate appreciation, and controlled liquidity. She noted sustained economic expansion in agriculture and industry, reinforcing optimism about continued growth.
Also, Lydia Jafiya, expressed confidence in the declining inflation trend, citing exchange rate appreciation, increased real GDP, and a strong external sector. She highlighted the importance of restrictive monetary policy in ensuring price stability and inclusive growth. While she acknowledged lingering global uncertainties, she remained hopeful that inflation would continue its downward trajectory with fiscal support.
Lamido Yuguda, pointed to stable global output projections and declining inflation pressures in advanced economies. He noted that Nigeria’s inflation, at 24.48 per cent in January 2025 post-rebasing, was beginning to moderate. Broad money supply also declined, reflecting the impact of tight monetary policy. He emphasised the importance of holding policy parameters steady to allow previous tightening measures to take full effect.
Meanwhile, Muhammad Abdullahi,reflected on the impact of monetary and fiscal measures over the past year, noting that inflation would have been higher without them. He emphasised the need to maintain current policy settings to reinforce inflation reduction efforts. He highlighted the stabilising effect of forex reforms and the lagged impact of monetary tightening, reinforcing his decision to keep policy parameters unchanged.
Noting renewed optimism for global recovery, albeit with risks from trade wars and geopolitical tensions, Murtala Sagagi pointed out that there is a gradual economic recovery in Nigeria, with easing inflation and improved external sector indicators. He stressed the importance of sustained policy coordination between fiscal and monetary authorities to maintain these gains.
Mustapha Akinkunmi on his part, highlighted the strong correlation between monetary policy and macroeconomic stability. He cited the benefits of 2024’s monetary policy reforms, including a stronger naira, positive real interest rates, and declining inflation momentum. He acknowledged risks from global economic shifts but remained confident in Nigeria’s growth trajectory, emphasising the need for policy consistency.
CBN governor and chairman of the MPC, Olayemi Cardoso, reinforced the importance of vigilance in navigating global and domestic economic developments. He highlighted the committee’s achievements in moderating inflation, stabilising the forex market, and boosting investor confidence.
While acknowledging global uncertainties, he pointed to Nigeria’s steady GDP growth, increased oil production, and a resilient banking sector. Although arguments for further tightening were considered, he concluded that maintaining the current policy stance was the most prudent approach to preserving stability and fostering sustainable growth.
The MPC’s decision to hold policy parameters steady reflects a cautious optimism about the trajectory of inflation and economic stability. While inflation remains a key concern, the rebased CPI, improved foreign exchange stability, and positive real interest rates signal a gradual improvement in macroeconomic conditions. With continued policy consistency and structural reforms, Nigeria’s economic outlook remains hopeful for the months ahead.
