The Central Bank of Nigeria’s (CBN) decision to maintain the Monetary Policy Rate (MPR) at 27.5 percent since November 2024 has sparked sharp disagreements between the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI). While MAN criticizes the move for threatening the nation’s industrial growth, LCCI views it as a balanced economic strategy in light of persistent inflationary pressures and macroeconomic uncertainties.
According to MAN’s Director General, Segun Ajayi-Kadir, the high interest rate is stifling local manufacturers, who already face lending rates exceeding 37 percent. He argues that such a policy contradicts global trends of lowering interest rates to stimulate economic activity and could derail the federal government’s “Nigeria First” policy, which aims to boost local production and reduce dependence on imports.
Ajayi-Kadir emphasized that prohibitively high credit costs hinder industrialization and capacity utilization. He warned that without access to affordable financing, Nigerian manufacturers will struggle to compete, leading to negative consequences for job creation, economic resilience, and long-term development. MAN urged the CBN to reconsider its stance and adopt policies more supportive of domestic manufacturing.
On the other hand, LCCI’s Director General, Dr. Chinyere Almona, defended the CBN’s decision, suggesting it reflects a cautious but prudent approach to monetary policy. She noted that while the current rate is challenging for businesses, it also signals a commitment to stabilizing the economy before loosening monetary conditions. Almona called for a forward-looking, data-driven policy path that would offer clarity and predictability for businesses planning future investments.
Almona further stressed that tackling Nigeria’s inflation requires more than monetary policy. She advocated for coordinated efforts with fiscal authorities to address structural problems such as insecurity, poor infrastructure, and food supply challenges. She also highlighted the need to improve credit access for micro, small, and medium-sized enterprises (MSMEs), which are vital to the country’s economic recovery and job creation goals.
Source: Vanguard