When the Central Bank of Nigeria’s Monetary Policy Committee gathered in February 2026 for its 304th meeting, the mood was one of cautious optimism. Headline inflation had fallen for eleven consecutive months. Reserves had climbed to a 13-year high of $50.45 billion. The naira was holding. The committee voted, 10 to 1, to cut the monetary policy rate by 50 basis points to 26.5 per cent – the first cut in months.
But buried in the personal statements of the eleven members was a far more sobering story. Taken together, they read less like a victory lap and more like a risk register for a still-fragile economy. Here are the fifteen critical concerns they raised — and why Nigerians should be paying attention, especially today, as the 305th MPC meeting concludes in Abuja.
- Inflation Is Down But Far From Over Every member acknowledged that at 15.10 per cent, headline inflation remained significantly above comfort levels. Core inflation – which excludes food and energy – sat at 17.72 per cent, with Governor Cardoso noting its “stickiness” reflected structural rather than cyclical drivers. That warning has aged poorly: by April 2026, headline inflation had risen back to 15.69 per cent, snapping eleven months of consecutive declines.
- Election-Year Fiscal Spending Is a Ticking Clock: Multiple members — including Emem Usoro, Bandele Amoo, and Muhammad Sani Abdullahi — specifically flagged pre-election fiscal injections ahead of the 2027 general elections as a major upside risk to inflation. With political activity already intensifying, excess liquidity from government spending could undo the hard-won disinflation gains of 2025. This remains an active threat.
- Excess Liquidity in the Banking System: Abdullahi raised a pointed concern about persistent excess liquidity in deposit-money banks, evidenced by substantial placements at the standing deposit facility. This suggests that despite a 27 per cent MPR at the time, monetary tightening was not fully transmitting into the real economy — banks found it more profitable to park funds with the CBN than to lend. With N34 trillion in OMO maturities expected over the next eight months, analysts warn this problem is worsening.
- Rising Non-Performing Loans: Member Aku Odinkemelu explicitly highlighted a rise in non-performing loans within the banking system, especially against the backdrop of the recapitalisation deadline. When banks are under capital pressure and loans go bad, credit to the real economy tightens — the opposite of what a rate-cutting cycle is meant to achieve.
- Weak Credit Transmission to Productive Sectors: Bandele Amoo observed that credit concentration remained skewed toward oil and gas and commerce, crowding out agriculture and SMEs. Philip Ikeazor reinforced this, noting “subdued credit to the core private sector”. A rate cut that does not filter through to farmers, manufacturers, and small businesses delivers limited economic benefit.
- Nigeria’s Public Debt at ₦153.29 Trillion: Abdullahi flagged the historically high public debt stock — ₦153.29 trillion as of Q3 2025 — as a structural vulnerability. Aloysius Ordu noted that between January and September 2025, debt service consumed $3.34 billion externally and ₦6.32 trillion domestically, severely constraining fiscal space. President Tinubu himself acknowledged this week that nearly half of projected 2026 revenue would go towards debt repayment.
- Middle East Conflict and Energy Price Shock: Amoo and Sagagi raised concerns about the US-Israel-Iran conflict and its potential to disrupt trade flows and spike petroleum prices. This concern proved prophetic. The escalation around the Strait of Hormuz in late February has contributed to renewed fuel price pressures, with pump prices reportedly climbing beyond N1,300 per litre in many locations, triggering the very transport and food inflation spiral the MPC had warned against.
- Structural Food Inflation Persists: Despite food inflation falling to 8.89 per cent in January, Odinkemelu and Sagagi warned that rural farmers were selling produce below cost to avoid perishability losses, eroding working capital for the next planting season. Sagagi added that high input costs and poor rural infrastructure, combined with massive food imports, meant the medium-term food inflation outlook remained fragile. This structural flaw cannot be resolved by monetary policy alone.
- Global Trade Protectionism and Geoeconomic Fragmentation: Every member referenced risks from rising protectionism, particularly US tariff policy and deepening US-China-EU tensions. For Nigeria, this matters because it affects commodity demand, capital flows, and the dollar’s trajectory — all of which directly influence the naira and external reserves. The recent rejection of Trump’s tariff regime by the US Supreme Court, noted by Ordu, has added new layers of uncertainty.
- Potential Reinstatement of the 15% Import Duty on Petroleum Products: Both Abdullahi and Ikeazor explicitly warned that the planned reinstatement of the 15 per cent ad valorem import duty on petroleum products in Q2 2026 could push PMS prices significantly higher, triggering second-round effects on transport, food, and core inflation. This has not yet been resolved and hangs over today’s MPC meeting as an immediate policy consideration.
- Capital Flow Vulnerability and a Weakening Dollar: Ordu observed that following months of dollar depreciation, a potential dollar rebound could redirect capital away from emerging markets, including Nigeria. The attractive real interest rate differential that has supported capital inflows is narrowing with each rate cut, making portfolio flows increasingly sensitive to global risk sentiment.
- The Naira May Be “Excessively Strong”: In a striking dissent from the dominant narrative, Ikeazor warned that “the naira now appears excessively strong, which may be detrimental for an export-orientated economy.” An overvalued currency makes Nigerian exports less competitive globally and can suppress earnings in the agriculture and manufacturing sectors — an important caution as the country tries to diversify beyond oil.
- Insecurity Disrupting Agriculture and Investment: Odinkemelu and Sagagi both flagged persistent insecurity as a key risk to agricultural production and private investment. Security challenges continue to disrupt farming in food-producing regions, raising logistics costs and suppressing rural economic activity. Sagagi called for stronger financial oversight of security agencies to free resources for operational effectiveness.
- The Growth-Employment Gap Relative to the $1 Trillion Economy Target: Murtala Sagagi, the sole member who voted for a larger 100 basis point cut, argued forcefully that GDP growth of around 4 per cent was insufficient to create jobs for Nigeria’s youth population or to put the economy on track for President Tinubu’s $1 trillion economy target. Without significantly higher growth, macroeconomic stability will remain divorced from the lived experience of ordinary Nigerians.
- Policy Communication and Credibility Must Not Be Compromised: Governor Cardoso and Ordu both stressed that the CBN’s credibility, hard-won through consistent policy over the past two years, must be carefully preserved. Cardoso wrote that “clear, consistent communication is not supplementary to monetary policy — it is integral to its effectiveness.” “Any decision today that appears reactive or inconsistent risks eroding the institutional trust that has underpinned naira stability and capital inflows.
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What Should Nigerians Expect Today?
The 305th MPC meeting concluding today faces a fundamentally different landscape from February. The eleven-month disinflation streak has broken: inflation rose in both March and April 2026. Fuel prices have surged. The Iran-US conflict is transmitting into energy costs. And N34 trillion in OMO maturities loom.
Analysts overwhelmingly expect the Committee to hold the MPR at 26.5 per cent, pausing the easing cycle before any further cuts. A minority view holds that a modest 25 basis point hike is possible, given the inflation reversal. What is virtually certain is that the CBN will signal heightened vigilance on liquidity, with the CRR and asymmetric corridor likely retained unchanged.
For Nigerians, the message from the boardroom is clear: the stabilisation of 2025 was real, but it was also fragile. The fifteen concerns raised by MPC members in February were not rhetorical; they were a roadmap of the vulnerabilities now unfolding. The task ahead is not just monetary management; it demands coordinated fiscal discipline, structural reform, and a government willing to treat price stability as a shared national project rather than the CBN’s burden alone.
Sunday Michael Ogwu is a Nigerian journalist and editor of Pinnacle Daily. He is known for his work in business and economic reporting. He has held editorial roles in prominent Nigerian media outlets, where he has focused on economic policy, financial markets, and developmental issues affecting Nigeria and Africa more broadly.