As the Central Bank of Nigeria (CBN) prepares to hold its 300th Monetary Policy Committee (MPC) meeting this week, the House of Representatives Committee on National Planning and Economic Development has raised concerns over the negative impact of persistently high interest rates on key economic sectors.
Chairman of the committee, Hon. Gboyega Isiaka, issued the caution during a strategic meeting with the Statistician General of the Federation and Chief Executive Officer of the National Bureau of Statistics (NBS), Adeyemi Adeniran, held in Abuja.
Isiaka noted that while the Federal Government’s market-oriented reforms have begun to yield visible economic benefits — including improved investor confidence and a 100% surge in the capital market over the past two years — the aggressive tightening of monetary policy may be doing more harm than good in some areas.
“The monetary policy rate (MPR) has been raised 10 times since January 2023, rising from 16.5% to 27.5%, in a bid to tackle demand-pull inflation,” Isiaka said. “However, this approach appears to be undermined by deep-rooted structural bottlenecks and supply chain challenges.”
He stressed that the elevated interest rate regime has adversely affected critical sectors such as manufacturing, agriculture, and small and medium-scale enterprises (SMEs) — all of which are vital for job creation and inclusive economic growth.
While acknowledging recent achievements, such as the CBN’s external reserves hitting their highest levels in three years and a reported profit of N38.8 billion (a turnaround from a N1.15 trillion loss in 2023), Isiaka urged monetary authorities to adopt a more balanced approach.
“In view of the current economic realities, we recommend a more accommodative policy stance that not only tackles inflation but also supports growth and employment generation,” he added.
The lawmaker’s remarks come just days ahead of a crucial MPC meeting, where the CBN is expected to review the direction of its monetary policy amid ongoing economic reforms.
Comments