May 13, (THEWILL) — A member of the Central Bank of Nigeria’s Monetary Policy Committee (MPC), Professor Murtala Sabo Sagagi, has warned that uncontrolled fiscal spending, especially during politically sensitive periods, could undermine the country’s ongoing fight against inflation.
Sagagi made the remarks in his personal statement following the 304th MPC meeting held in February, where policymakers reviewed inflation trends, monetary policy measures and broader economic conditions.
According to him, Nigeria’s recent progress in slowing inflation remains fragile and could easily be reversed if fiscal authorities fail to maintain spending discipline.
“Close coordination between monetary and fiscal policy is essential,” Sagagi stated.
He warned that increased government spending associated with electoral cycles could weaken the impact of the Central Bank’s tightening measures.
He urged the CBN to sustain engagement with fiscal authorities to ensure responsible public spending and prevent renewed inflationary pressures.
The economist also expressed concern over the persistence of high commercial lending rates despite monetary easing efforts.
According to him, if reductions in benchmark interest rates fail to translate into lower borrowing costs for businesses, it could indicate deeper structural problems within the financial system.
Sagagi further highlighted insecurity and structural weaknesses in agriculture as major threats to price stability and economic recovery.
He noted that continued attacks on farming communities have disrupted food supply chains and weakened agricultural productivity.
He added that many farmers still struggle with rising production costs, including fertilisers, seedlings and pesticides, despite easing commodity prices in some markets.
The CBN has maintained a tight monetary policy stance over the past year to curb inflation and stabilise the economy following subsidy reforms, exchange rate volatility and rising food prices.
Data from the National Bureau of Statistics showed Nigeria’s headline inflation rate rose to 15.38 percent in March 2026 from 15.06 percent in February, reinforcing concerns that monetary tightening alone may not be enough without stronger fiscal discipline and structural reforms.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
