Raphael Johnson
Ahead of Central Bank of Nigeria’s (CBN) 300th Monetary Policy Committee (MPC) meeting this week, the House of Representatives Committee on National Planning and Economic Development has raised concerns about the consequences of high interest rates aimed at curbing inflation in the country.
Chairman of the committee, Hon. Gboyega Isiaka, who raised the concern during a meeting with the Statistician General of the Federation and chief executive officer of the National Bureau of Statistics (NBS), Adeyemi Adeniran, in Abuja, said that high interest rates have had their toll on the manufacturing, agriculture, and small and medium enterprise (SME) sectors.
“The monetary policy rate (MPR) has been raised 10 times since January 2023 and currently stands at 27.5 percent from 16.5 percent in 2023, with the aim of curbing demand-pull inflation.
“However, it will appear that the effectiveness of this policy has been undermined by structural bottlenecks, supply chain inefficiencies, etc.
“It is, therefore, our view that considering the current economic landscape, the monetary authorities, as they meet this week, should consider a more accommodative stance that also promotes growth and employment generation,” Isiaka stated.
Hon. Isiaka noted that there is, however, a consensus that the current administration has implemented bold, market-oriented reforms that are beginning to yield positive outcomes, with the economy showing signs of stabilisation and a gradual return of investor confidence.
Speaking further, he insisted that Nigeria’s capital market had surged by about 100 percent in the last two years, while CBN posted its strongest external reserves level in more than three years, adding that the apex bank also reportedly recorded a profit of N38.8 billion – a significant recovery from the N1.15 trillion loss it recorded in 2023.
