The IMF has backed the Central Bank of Nigeria's September rate cut to 23%, calling it a normalization and the right move given significant progress in lowering inflation. However, the IMF said monetary policy remains tight rather than moving to easing. It urged the government to raise revenue from non-oil sources, deepen structural reforms to attract private investment and create jobs, and channel subsidy-reform savings to vulnerable Nigerians. The IMF upgraded Nigeria's 2026 growth forecast to 4.2% from 4.0% last year and projected 4.3% next year, citing higher oil prices and a services-driven economy. Zeidane made these remarks at the IMF-World Bank Annual Meetings 2026 in Thailand.
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The IMF endorsed the Central Bank of Nigeria's decision to adjust its monetary policy stance, saying inflation progress allowed a reduction in the real interest-rate burden, though conditions remain tight and this is not yet monetary easing. The Fund urged the government to mobilise more non-oil revenue, deepen structural reforms to attract private investment and create jobs, and direct savings from subsidy reforms to vulnerable Nigerians. It upgraded Nigeria's 2026 growth forecast to 4.2% from 4.0% last year, with 4.3% projected for next year, citing higher oil prices that boosted foreign exchange receipts and services as the main driver of domestic expansion. The IMF also warned against relying on oil revenue to finance development, noting that exchange-rate reforms and petrol subsidy removal have raised living costs for households.
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The International Monetary Fund endorsed the Central Bank of Nigeria's decision to cut its benchmark rate to 23%, saying the move reflects progress in taming inflation even though monetary policy remains tight. IMF African Department Director Zeine Ould Zeidane said the September cut should not be seen as a shift to accommodative policy and that policy must keep responding to incoming economic data. At its September meeting, the CBN cut the Monetary Policy Rate by 350 basis points from 26.5% to 23%, surprising many market participants who had expected a hold. Nigeria's headline inflation eased slightly to 15.39% in August 2026 from 15.43% in July, according to the National Bureau of Statistics, marking a third straight month of disinflation. The IMF also warned that further tightening may still be needed in many African economies, so future rate moves will depend on whether inflation keeps moderating.
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Central Bank of Nigeria (CBN) Governor Olayemi Cardoso argued that credible monetary policy depends on informed committee deliberations, independent perspectives and clear communication of decisions to markets and the public. Speaking at an IMF seminar in Bangkok, he said the CBN gives external Monetary Policy Committee members technical support and access to independent specialists, and publishes each member's policy statement. He cited the September meeting, when members agreed that weaknesses in the transmission mechanism needed fixing and cut the benchmark rate by 350 basis points, from 26.5% to 23%, a move that surprised markets. IMF First Deputy Managing Director Dan Katz said markets absorbed the decision without significant disruption. Swiss National Bank governing board chair Martin Schlegel and Banque de France governor Emmanuel Moulin also described how their institutions build consensus and communicate a common position.
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