Nigeria eyes $10bn savings through lower inflation, interest rates

Politics Spice Special Features Education Sex & Relationship Interview Columns Opinion Advertise with us Nigeria eyes $10bn savings through lower inflation, interest rates Business October 15, 2026 12:00 am File photo: The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.

Nigeria could save more than $10bn in fiscal costs by bringing inflation into single digits and creating room for interest rates to decline, Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, has said.

Oyedele said the potential savings, based on 2026 figures, would ease pressure on government finances and strengthen the case for closer coordination between fiscal and monetary authorities.

He spoke on the sidelines of the International Monetary Fund and World Bank annual meetings in Thailand, where policymakers discussed economic stability, financing costs and growth prospects.

The minister said the Central Bank of Nigeria’s planned shift towards inflation targeting would make cooperation between monetary and fiscal authorities more important as the government pursues lower inflation.

According to him, achieving single-digit inflation would help create conditions for interest rates to fall to similar levels, reducing the cost of servicing government debt and easing pressure on public finances.

“This is a top priority for us,” Oyedele said, stressing that the government was committed to policies that would help lower inflation and borrowing costs.

The projected $10bn in savings underscores the fiscal implications of Nigeria’s interest rate environment, where elevated borrowing costs increase the amount the government must spend to finance its obligations.

A reduction in interest rates could lower the cost of new borrowing and refinancing, while easing the pressure that debt-servicing payments place on government revenue.

Oyedele also credited the CBN’s management of the foreign exchange market with helping to stabilise the naira and support its gradual appreciation.

He said the improved currency environment was another indication of progress in macroeconomic management.

Nigeria’s headline inflation rate eased slightly to 15.39 per cent in August 2026 from 15.43 per cent in July, extending the recent moderation in price increases.

Despite the slowdown, many households continue to feel the effects of high prices.

The IMF raised its forecast for Nigeria’s economic growth in 2026 to 4.2 per cent and projected growth of 4.3 per cent in 2027.

The World Bank also projected that the economy would expand by 4.3 per cent in 2026, compared with 4.0 per cent in 2025, and grow by 4.4 per cent in both 2027 and 2028.

The forecasts point to improving growth prospects, although the pace of expansion and its impact on living standards will depend on inflation, investment, productivity and employment.

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