“Stability is not everything,” the German economist and former finance minister Karl Schiller once observed, “but without stability, everything is nothing.” Nigeria in mid-2026 increasingly demonstrates the wisdom of the second half of that proposition. It may also be approaching the point at which the first deserves greater attention.

🇳🇬 Here's What Happened

Consider where we stand. Headline inflation declined to 15.91 per cent in June 2026; core inflation stood at 15.92 per cent, though food inflation remained higher at 17.52 per cent. The foreign exchange market is far calmer than in 2023 and 2024, the official rate near ₦1,380 to the dollar and the parallel-market gap under two per cent. External reserves have passed $52 billion, a seventeen-year high; official-channel remittances have surged; and broad money growth has cooled from above 56 per cent in 2024 to under 14 per cent.

These gains reflect restrictive monetary policy and foreign exchange reform, but also fiscal developments, food prices, base effects and supply conditions. The Central Bank of Nigeria deserves credit for the progress made, yet the more important question is what comes next. If stabilisation succeeds, what is stability for? The answer is growth in investment, productivity, employment and real incomes. In a market economy, much of that growth depends on viable businesses obtaining credit at prices that make investment sensible. That is the arithmetic now confronting the Monetary Policy Committee.

Let us begin from first principles. The CBN Act assigns the Bank responsibility for monetary and price stability, and that priority reflects one of the hardest lessons of economic history.

📌 Key Details

The same Act establishes the Monetary Policy Committee to facilitate the attainment of price stability and to support the economic policy of the Federal Government, so the ordering is deliberate: stability first, growth through it. Persistent inflation erodes purchasing power and savings, and its burden is uneven: the wealthy shelter in assets and foreign currency, while the wage earner, pensioner and small trader holding cash cannot.

Inflation is a regressive tax in all but name. It also reshapes behaviour: contracts shorten, banks compress lending tenors, and firms protect working capital rather than expand productive capacity.

Milton Friedman argued that inflation is always and everywhere a monetary phenomenon. The Nigerian experience reminds us that it can also carry fiscal, exchange-rate and supply-side components. Even so, monetary authorities cannot remain indifferent when inflation becomes entrenched, and no economy builds durable growth on unstable prices.

Seen in this light, the CBN’s tightening cycle was not hostile to growth. The MPR rose from 18.5 per cent in May 2023 to a peak of 27.5 per cent before easing began; in February 2026 the MPC cut the rate to 26.5 per cent, and in July it held that rate and the 45 per cent Cash Reserve Requirement. Those measures imposed costs, but they were necessary to restore credibility, and they are working.

Here, however, a second principle deserves equal prominence: price stability is instrumental, not terminal. No nation eats its consumer price index. The purpose of stable prices is an environment in which households can plan, businesses can invest, and the economy can generate productive employment. The distinction matters more as disinflation progresses.

With the policy rate at 26.5 per cent, borrowing costs remain elevated, and many projects viable under normal financial conditions cannot justify borrowing. The pain is sharpest for small and medium enterprises: large firms can turn to retained earnings, commercial paper, bonds or foreign credit lines; a smaller manufacturer or agribusiness usually cannot.

📰 Source: Punch Nigeria