CFG Advisory Urges CBN to Cut Rates, Target Inflation, and Drive Growth Amid High Debt
CFG Advisory has called on the Central Bank of Nigeria (CBN) to reduce its benchmark interest rate and immediately begin an inflation-targeting program to stimulate economic growth. Nigeria’s Monetary Policy Rate (MPR) currently stands at 27.25%, one of the highest in Africa, even as many Sub-Saharan economies have begun lowering rates. The advisory group argued that a lower rate could help reverse the country’s slowing growth and tackle persistent inflationary pressures.
Nigeria’s inflation rate, although declining since March, stood at 22.2% in June 2025, which the CBN has cited as a reason for maintaining tight monetary policy. CFG Advisory, however, believes the bank should aim to cut rates by the end of Q3 2025 while targeting inflation between 12% and 14%. Based on historical trends, the firm estimates that such measures could boost Nigeria’s economic growth to between 8% and 10% annually.
The country’s growth momentum has slowed, with GDP expansion falling from 3.8% in Q4 2024 to 3.1% in Q1 2025. CFG Advisory stressed that Nigeria needs a clear, growth-oriented economic plan that addresses both monetary and fiscal challenges. This includes reducing its $100 billion-plus debt burden and generating additional revenue streams, especially given the high cost of debt servicing.
While the firm noted that Nigeria faces no immediate risk of default, it urged the government to optimise its capital structure and attract more investment in non-oil exports, particularly in agriculture. Among its proposals was the sale of joint venture oil assets to raise between $35 billion and $40 billion, which could help reduce debt and improve the national balance sheet.
Beyond monetary easing, CFG Advisory recommended comprehensive structural reforms, strategic fiscal management, and better coordination between monetary, fiscal, trade, investment, and industrial policies. The goal, the firm said, should be to restore purchasing power, achieve sustainable 8–10% growth, and lift millions of Nigerians out of poverty. It warned that without decisive action, the country risks prolonged slow growth despite its economic potential.
Source: Business day