Nigeria’s central bank (CBN) has raised interest rates for the third time in 2024, in a bid to control high inflation currently at 33.69%. While this hawkish policy aims to curb inflation, businesses are feeling the squeeze.
The Centre for the Promotion of Public Enterprise (CPPE) is urging the CBN to balance its approach. They advocate for a development finance window that would offer businesses access to single-digit interest rate loans.
Obtaining loans at the current market rates, hovering around 30%, is stifling investment and hindering economic growth according to CPPE Director-General, Dr Muda Yusuf.
The CPPE believes that by facilitating access to cheaper, long-term loans, businesses can continue to invest and produce, ultimately contributing to a more robust economy. They caution that an exclusive focus on curbing inflation at the expense of business growth could be detrimental in the long run.