The International Monetary Fund (IMF) has supported the Central Bank of Nigeria’s (CBN) decision to reduce its benchmark interest rate, saying the country’s monetary policy remains restrictive despite the adjustment. Zeine Zeidane, director of the IMF’s African Department, said Nigeria had made significant progress in reducing inflation, creating room for a rate adjustment to ease the pressure associated with high real interest rates. He made the remarks during a press briefing at the 2026 IMF and World Bank annual meetings in Bangkok, Thailand.
Zeidane said the decision to lower interest rates was appropriate given the progress recorded in bringing inflation down from elevated levels. According to him, the adjustment was intended to normalise monetary policy and reduce real interest rates. He, however, stressed that the move should not be interpreted as a full shift towards monetary easing, noting that the overall policy stance remained tight. The IMF’s position indicates that although the rate reduction is supported, the central bank’s approach to controlling inflation remains restrictive.
In September 2026, the CBN’s Monetary Policy Committee reduced the Monetary Policy Rate (MPR) by 350 basis points, bringing it down from 26.5 per cent to 23 per cent. The decision followed an extended period of tight monetary policy aimed at containing inflation and stabilising the economy. The IMF’s endorsement comes as Nigeria continues efforts to bring inflation under control while adjusting monetary policy in response to changing economic conditions. <Cite refs={[“turn644008view0”]}/>
The IMF also called on Nigeria to strengthen revenue collection outside the oil sector, despite improved foreign exchange earnings linked to higher oil prices. Montfort Mlachila, deputy director of the IMF’s African Department, said rising oil prices had boosted the country’s foreign exchange receipts, strengthened reserves and increased liquidity in the economy. He nevertheless urged the government to mobilise more domestic revenue to create fiscal space for investment in infrastructure, healthcare and education.
Mlachila further said Nigeria needed to pursue structural reforms to attract private investment and generate employment. He pointed to the country’s large market, youthful population and technology-driven entrepreneurs as potential advantages in attracting investors. However, he said improvements in governance, the business environment and economic integration would be necessary to accelerate growth and create jobs. The IMF’s recommendations therefore extend beyond monetary policy, emphasising the need for stronger non-oil revenue and reforms that support sustainable economic development.
