The Centre for the Promotion of Private Enterprise (CPPE) has commended the Central Bank of Nigeria (CBN) and its Monetary Policy Committee (MPC) for measures aimed at easing credit conditions in the economy.
CPPE’s Chief Executive Officer, Dr Muda Yusuf, said in a statement on Tuesday that the decision marked a clear policy shift toward supporting growth and investment after a prolonged phase of aggressive monetary tightening to curb inflation.
He was reacting to the outcome of the 302nd meeting of the MPC held in Abuja.
The MPC reduced Nigeria’s baseline interest rate, the Monetary Policy Rate (MPR), from 27.50 per cent to 27 per cent.
The committee also lowered the Cash Reserve Ratio (CRR) for commercial banks from 50 per cent to 45 per cent, while retaining it at 16 per cent for merchant banks.
It kept the Liquidity Ratio unchanged at 30 per cent but adjusted the asymmetric corridor around the MPR to +250/-250 basis points from +500/-100 basis points.
Yusuf described the MPC’s decision as a strategic and well-timed shift from a phase of stabilisation to one of accelerating growth.
He said if sustained and complemented by fiscal and structural reforms, the measures would stimulate growth, create jobs, boost private sector performance, and enhance government revenues through an expanded tax base.
“The CPPE regards this as a step in the right direction toward building a more resilient, inclusive and growth-oriented Nigerian economy,” Yusuf said.
According to him, the policy easing comes at a time when Nigeria has recorded five consecutive months of declining inflation, an indication that previous tightening measures were yielding results.
“Having restored a measure of macroeconomic stability and slowed inflationary pressures, the MPC’s pivot toward growth is both logical and timely,” he said.
Yusuf noted that high interest rates in recent quarters had constrained private sector credit, raised the cost of funds, and slowed business expansion.
“By lowering the MPR and CRR, the CBN is deliberately working to improve liquidity conditions, reduce borrowing costs and unlock capital for productive sectors of the economy,” he said.
He explained that the move would not only improve credit conditions and encourage new investments but also strengthen financial intermediation and ensure macroeconomic stability.
While welcoming the monetary easing, Yusuf stressed that fiscal policy must play a complementary role to fully unlock Nigeria’s growth potential.
He urged fiscal authorities to sustain consolidation efforts to maintain macroeconomic stability, preserve investor confidence, and prioritise critical infrastructure investment to reduce production and logistics costs.
According to him, government must also strengthen the regulatory and institutional framework to foster a business-friendly environment, while addressing security challenges that continue to constrain private sector investment and rural productivity. (NAN)
