Minister of Finance and Coordinating Minister of the Economy Wale Edun has indicated that Nigeria could see interest rate cuts in the near term if the current disinflation trend is sustained. Speaking in an interview on the sidelines of Abu Dhabi Sustainability Week, Edun said a continued slowdown in inflation would give the Central Bank …
Edun Hints at Possible Interest Rate Cuts as Inflation Eases
Minister of Finance and Coordinating Minister of the Economy Wale Edun has indicated that Nigeria could see interest rate cuts in the near term if the current disinflation trend is sustained.
Speaking in an interview on the sidelines of Abu Dhabi Sustainability Week, Edun said a continued slowdown in inflation would give the Central Bank of Nigeria (CBN) room to ease monetary policy.
He explained that falling inflation and lower borrowing costs would reduce the strain on public finances, particularly as volatile oil prices continue to pressure government revenue.
He believes that savings from debt servicing would help improve the country’s fiscal position, stating that the CBN has made “excellent” progress in taming inflation.
Pinnacle Daily reports that the apex bank has scheduled its first Monetary Policy Committee (MPC) meeting for Monday, February 23, and Tuesday, February 24, 2026.
Since 2022, CBN has more than doubled interest rate levels before cutting rates by 50 basis points in September 2025 to 27 per cent, following a sharp retreat in inflation from late-2024 highs.
The 2026 budget projections show that more than a quarter of the country’s roughly N58 trillion ($40 billion) 2026 budget has been allocated to interest payments, while subdued oil receipts are expected to keep revenue around N34 trillion.
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This leaves an estimated budget deficit of about N24 trillion, or roughly 4.3 per cent of gross domestic product, wider than last year’s shortfall.
While inflation data for December, due later today, are expected to show a temporary acceleration, Citigroup Inc. said in a note on Wednesday that price pressures should resume easing from January.
The bank forecasts a 75 to 100 basis-point rate cut in February and sees scope for as much as 700 basis points of reductions in 2026, as inflation is projected to slow to 14.1 per cent by year-end.
According to the minister, the government’s borrowing strategy would remain flexible and market-driven, with debt issuance guided by pricing, timing, investor appetite and compliance with legislated limits under the medium-term expenditure framework.
He added that the government is intensifying efforts to raise revenue and reduce dependence on borrowing through digitisation and automation across revenue-generating agencies.
Under new directives, ministries, departments and agencies are required to stop collecting cash and migrate to automated systems to enhance transparency and improve remittances.
He also said the government is counting on privatisation proceeds, divestments by the state-owned Nigerian National Petroleum Company, and investments aimed at boosting oil production to help fund the budget.
“The aim is to do everything that we can to meet the revenue targets,” Edun said.
Data from the Nigeria Revenue Service show that the government collected N28 trillion in taxes last year, 30 per cent above target.
Oil revenue rose 21 per cent to N6.8 trillion, while non-oil revenue jumped 33 per cent to N21.5 trillion.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
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