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CBN Retains Interest Rate at 26.5% as MPC Prioritises Inflation Control, Economic Stability

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The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR), the country’s benchmark interest rate, at 26.5 per cent, citing the need to sustain macroeconomic stability amid easing domestic inflation and growing global economic uncertainties.

The decision was announced on Tuesday by the Governor of the Central Bank of Nigeria and Chairman of the MPC, Olayemi Cardoso, at the end of the committee’s 306th meeting held in Abuja.

The latest decision marks the second consecutive meeting in 2026 in which the apex bank has maintained the benchmark lending rate, signalling a cautious approach to monetary policy while monitoring both domestic and international economic developments.

In addition to retaining the MPR at 26.5 per cent, the committee also left other key monetary policy parameters unchanged. The asymmetric corridor around the MPR was maintained at +500/-100 basis points, while the Cash Reserve Ratio (CRR) remained at 40.5 per cent for Deposit Money Banks and 16 per cent for Merchant Banks. The Liquidity Ratio was equally retained at 30 per cent.

Addressing journalists after the meeting, Cardoso explained that the committee’s decision followed a comprehensive assessment of prevailing economic conditions and the balance of risks facing the Nigerian economy.

According to him, although Nigeria’s headline inflation moderated slightly to 15.91 per cent in June 2026—its first decline in three months—the MPC considered it prudent to maintain its current monetary policy stance in view of heightened global uncertainties, particularly the renewed geopolitical tensions in the Middle East.

He noted that the committee believes holding rates steady would provide sufficient time to evaluate incoming economic data before considering any future policy adjustments.

Cardoso observed that despite increasing global risks, particularly those capable of triggering renewed inflationary pressures through higher energy and commodity prices, the Nigerian economy has continued to demonstrate resilience.

He attributed the country’s economic stability to the reforms implemented by both the Federal Government and the Central Bank, which, he said, have strengthened macroeconomic fundamentals and enhanced the economy’s capacity to withstand external shocks.

The CBN Governor further commended the growing coordination between fiscal and monetary authorities, describing the improved policy alignment as critical to achieving sustainable economic growth, price stability and overall macroeconomic objectives.

He also disclosed that the MPC welcomed the positive outcome of the ongoing banking sector recapitalisation programme, noting that Nigeria’s banking industry has continued to record stronger prudential and financial soundness indicators.

According to Cardoso, the committee expressed confidence that inflation would continue on a gradual downward path in the coming months but cautioned that any prolonged escalation of the Middle East conflict could reverse recent gains by exerting fresh pressure on global supply chains and commodity prices.

To safeguard financial system stability, the MPC urged the Central Bank to sustain robust supervision of financial institutions in order to preserve the resilience of the banking sector and mitigate emerging risks.

Reaffirming the committee’s commitment to maintaining price stability and ensuring a sound financial system, Cardoso assured that the MPC remains prepared to adjust monetary policy whenever evolving macroeconomic conditions require such action.

The latest policy decision comes on the heels of the National Bureau of Statistics’ report showing that Nigeria’s inflation rate declined to 15.91 per cent in June 2026, raising cautious optimism that the country’s tight monetary policy measures may be yielding positive results while supporting broader economic stability.

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Tinubu To Present 2027 Budget Before Year-End As FEC Approves Five-Year Development Plan

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President Bola Ahmed Tinubu
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President Bola Tinubu is expected to present the 2027 Appropriation Bill to the National Assembly before the end of 2026, as the Federal Executive Council (FEC) approved the National Development Plan 2026–2030 and new policy measures aimed at strengthening food security and tackling child stunting.

The Minister of State for Budget and Economic Planning, Doris Uzoka-Anite, disclosed this on Wednesday while briefing State House correspondents on the outcomes of the FEC meeting chaired by President Tinubu at the Presidential Villa, Abuja.

Uzoka-Anite also announced the council’s approval of the Revised National Policy on Food and Nutrition 2026, which seeks to establish sustainable financing mechanisms and strengthen collaboration among ministries responsible for agriculture, livestock, health and education, as well as development partners.

The announcements followed the conclusion of the 32nd Nigerian Economic Summit, held in Abuja from October 26 to 28, which focused on key issues affecting the country’s economic development.

Meanwhile, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has clarified that the $21.7 billion borrowing proposal transmitted by President Tinubu to the National Assembly is intended to finance investments in productive assets and infrastructure rather than recurrent expenditure.

Oyedele explained that the proposal represents a multi-year investment programme spanning approximately five years, rather than an immediate drawdown of the entire amount.

According to him, $10.6 billion is earmarked for critical transportation infrastructure, including the Sokoto–Badagry Highway, Lagos–Calabar Coastal Highway and Kano–Kaduna Metro Rail.

He further disclosed that more than $7.9 billion would be sourced from multilateral and bilateral development partners, including $5 billion from the World Bank, at an average interest rate of approximately 2.1 per cent.

The proposed financing package also includes $3.3 billion for state government projects and $1.45 billion for projects in the Federal Capital Territory.

The planned 2027 budget presentation and the approval of the five-year development plan underscore the Federal Government’s efforts to align fiscal planning, infrastructure investment and social development priorities with its broader economic agenda.

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Tinubu Rules Out Fuel Subsidy Return, Says Nigeria Cannot Go Back to ‘Egypt’

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President Bola Tinubu has ruled out any return to petrol subsidy, insisting that the removal of the policy was necessary to prevent Nigeria’s economy from sliding into bankruptcy.

The President reiterated his position on Monday during a meeting with members of the City Boy Movement, a youth-driven political and advocacy group, where he defended the economic reforms introduced by his administration.

Tinubu said the government could no longer sustain the financial burden of subsidising petrol, arguing that the country lacked the resources required to continue funding the scheme.

“I came, and I removed the subsidy on my first day. Nigeria would have gone bankrupt; there was nothing left to pay for subsidies,” he said.

Using a biblical and Quranic analogy to underscore his position, the President declared that reversing the policy would amount to returning to an unsustainable economic system.

“When Moses (Musa) left Egypt, the Red Sea parted and gave way. You cannot ask Moses to go back to Egypt. With your energy and support, we will never go back to Egypt,” he stated.

The removal of petrol subsidy, announced during Tinubu’s inauguration on May 29, 2023, marked a major shift in Nigeria’s fiscal policy. The decision significantly increased petrol prices and contributed to mounting pressure on household incomes, transportation costs and businesses.

Petrol prices, which were below ₦200 per litre before the policy change, have since risen substantially, with prices reported at between ₦1,350 and ₦1,405 per litre across major filling stations.

The resulting increase in energy and transportation costs has continued to fuel public concerns over inflation, declining purchasing power and the overall cost of living.

However, the Federal Government has maintained that subsidy removal is critical to reducing fiscal pressure, improving public revenue and creating room for investment in infrastructure and other priority sectors.

Tinubu acknowledged the political contest surrounding the policy, noting that his opponents had promised to restore fuel subsidy. He nevertheless maintained that his administration would not reverse the reform.

Beyond defending the policy, the President urged members of the City Boy Movement to mobilise support for his administration by communicating its achievements and future plans to young Nigerians across campuses, markets and rural communities.

He also encouraged eligible young people to obtain their Permanent Voter Cards (PVCs) and participate in the electoral process.

The debate over fuel subsidy remains a central issue in Nigeria’s economic policy, with the government defending the reform on fiscal sustainability grounds while households and businesses continue to grapple with the effects of higher fuel prices.

 

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FG Rules Out Electricity Tariff Hike, Targets 24-Hour Power Supply

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The Federal Government has ruled out any plan to increase electricity tariffs, saying its priority is to improve power supply and ensure reliable electricity across the country.

The Minister of Power, Joseph Tegbe, gave the assurance in Ibadan, Oyo State, on Thursday, amid concerns and speculation about a possible increase in electricity tariffs.

Tegbe spoke during the groundbreaking ceremony for five interconnected mini-grid projects with a combined generation capacity of 17.7 megawatts and a 17.74-megawatt-hour Battery Energy Storage System (BESS).

“I want to say this clearly and without ambiguity: there is no plan to increase electricity tariffs. What we are planning is a power sector that works around the clock. Our commitment is 24/7 power,” the minister said.

He urged Nigerians to disregard reports suggesting an impending tariff hike, stressing that the government was focused on improving electricity generation, transmission and distribution.

The five mini-grid projects are located in Bola, Jiboye, Molade-Adelubi, Ogo Oluwa and Sooko-Elega. They are expected to provide electricity to communities across Akinyele, Ido, Ibadan North, Egbeda and Lagelu Local Government Areas of Oyo State.

According to the minister, the projects are designed to expand electricity access, reduce dependence on petrol and diesel-powered generators, and create a more favourable environment for businesses, investment and job creation.

Tegbe said the Federal Government was also implementing a broader energy strategy aimed at improving electricity supply through designated energy corridors, including the Lagos-Ogun, Abuja-Kaduna-Kano and Benin-Enugu-Port Harcourt corridors.

He added that efforts were underway to strengthen the national grid and upgrade generation and transmission infrastructure across the country’s eastern, western and central corridors.

The minister described the mini-grid initiative as part of President Bola Tinubu’s Renewed Hope Agenda, noting that similar electricity interventions had been implemented in communities across several states with support from the Rural Electrification Agency (REA).

He commended Tinubu for his leadership and acknowledged the contributions of the REA, project developer Paras Energy and Natural Resources Development Limited, the World Bank and the Ibadan Electricity Distribution Company.

Tegbe also recognised the Oyo State Government, traditional rulers and other stakeholders for their roles in facilitating the projects.

The initiative is expected to improve electricity reliability in the beneficiary communities, support local economic activities and reduce energy costs for households and businesses.

 

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