Ola Akinwunmi
In a significant shift, the Central Bank of Nigeria (CBN) has decided to maintain the Monetary Policy Rate (MPR) at 27.50%, halting a series of consecutive hikes aimed at curbing inflation. This decision has been met with approval from the Centre for the Promotion of Private Enterprise (CPPE), which has long advocated for a pause to support economic growth.
Dr. Muda Yusuf, Chief Executive Officer of CPPE, expressed relief at the CBN’s decision, noting that continuous rate increases had been exerting pressure on critical sectors of the economy. “The persistent tightening stance was troubling, especially given the declining growth in sectors like agriculture and manufacturing,” Yusuf stated. He emphasized that these sectors require monetary and fiscal support rather than further tight.
Despite welcoming the pause, CPPE urges the CBN to implement additional measures to stimulate economic recovery. Yusuf highlighted the need for increased support to development finance institutions to address financing challenges exacerbated by the previous tight monetary policy regime. “Strategic economic sectors need support to recover from the shocks of aggressive rate hikes,” he added.
The CBN’s decision comes in the context of a slight decline in Nigeria’s inflation rate, which stood at 34.80% in December 2024, down from 34.60% in November. While this decrease is a positive sign, experts caution that the economy still faces significant challenges. Yusuf advised that overemphasis on revenue generation could harm investments and exacerbate inflationary pressures, urging a balanced approach to economic policy.
As the CBN’s Monetary Policy Committee (MPC) convenes for its 299th meeting, stakeholders are keenly observing how the bank will navigate the delicate balance between controlling inflation and fostering economic growth. The CPPE’s call for a more supportive monetary environment underscores the broader sentiment within the business community, advocating for policies that promote investment and economic resilience.
