Nigeria’s economy is showing signs of stability as the Central Bank of Nigeria (CBN) kept its benchmark interest rate at 27.50%, following a year of aggressive hikes to curb inflation. 

The decision reflects growing confidence in the country’s macroeconomic environment and a steadying foreign exchange market.

CBN Governor Olayemi Cardoso highlighted that inflation, which had surged to 28-year highs in 2024, is now on a downward trend. The recent rebasing of Nigeria’s inflation index placed the January rate at 24.48%, a significant adjustment that suggests easing price pressures.

"Inflation is trending down, and it's looking positive," Cardoso told reporters in the capital Abuja, adding that the aim was to bring inflation down to single digits.

The stability in monetary policy comes amid President Bola Tinubu’s economic reforms, which included removing fuel subsidies and adjusting the naira’s value to strengthen public finances. While these measures initially fueled inflation, the latest data indicates progress toward the central bank’s long-term goal of achieving single-digit inflation.

Cardoso noted that confidence is gradually returning to Nigeria’s markets, a key factor in ensuring sustainable economic growth. He emphasized that as stability improves, the bank will be in a stronger position to adjust interest rates to support investment and economic expansion.

"We can see that confidence is gradually returning to our markets, which shows that we are on the right course now. Obviously, as that happens, we are in a better position to begin the process of moderating rates because stability is very, very important," Cardoso said.

With the statistics agency set to release rebased GDP data, Nigeria is poised for a clearer economic outlook. If trends continue in this direction, the country could regain its position as Africa’s largest economy, reinforcing optimism about its financial future.