The Central Bank of Nigeria (CBN) has announced a reduction in the Monetary Policy Rate (MPR) from 26.5% to 23%, a decision that has generated mixed reactions among key stakeholders.
During the 307th Monetary Policy Committee meeting held in Abuja, CBN Governor Mr. Olayemi Cardoso stated that the adjustment is intended to better align with current market realities. Despite this rationale, some experts consider the new rate insufficient to significantly boost business activities.
Mr. Lucky Amiwero, President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), argued that despite the reduction, the rate remains too high for businesses reliant on bank lending. He emphasized the ongoing challenges posed by infrastructure deficits and high borrowing costs, stating, “When you look at the economy… the cost of borrowing remains a major challenge.”
Conversely, Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), welcomed the rate cut as a critical reset that could relieve financial pressures on the real sector. He noted that the previous discrepancy between the MPR and prevailing market rates had weakened the effectiveness of monetary policy.
Other industry leaders echoed similar sentiments. Fiona Ahimie, President of the Chartered Institute of Stockbrokers, highlighted the implications for the capital market, stating that the rate reduction could spur a reallocation of investments toward longer-term securities and equities.
In response to the broader economic context, Dr. Ubah Jeremiah, Chief Investment Officer at VNL Capital Asset Management, framed the 350 basis points cut as a bold move by the CBN, reflecting growing confidence in the country’s economic stability.
The CBN reaffirmed its commitment to effective policy transmission, emphasizing that this rate cut is not merely a monetary easing but a strategic alignment with current macroeconomic and financial conditions.
