The Lagos Chamber of Commerce and Industry (LCCI) has urged the Central Bank of Nigeria (CBN) to take a cautious stance on monetary policy while providing clear signals of potential interest rate cuts.
The Director-General of LCCI, Dr Chinyere Almona, in a statement on Tuesday in Lagos, made this call following the decision of CBN to maintain the Monetary Policy Rate (MPR) at 27.5 per cent.
Almona said that the advice was necessary due to sustained economic improvements in the country.
She said while the recent marginal decline in headline inflation offered some relief, a cautious stand by the CBN was critical.
Almona noted that in spite of the drop in inflation to 23.71 per cent, Nigeria’s macroeconomic conditions remained harsh.
She said that a premature reduction in interest rates under such conditions could undermine investors’ confidence and raise doubts about the commitment of the CBN to price stability.
“Maintaining the current rate reflects a balanced approach: one that avoids inflationary risks while allowing time for consistent macroeconomic trends to emerge,” she said.
Almona urged the Monetary Policy Committee (MPC) to complement the rate hold with a forward-guided, data-driven roadmap for future easing.
Such a strategy, she said, would provide the business community with the clarity needed for medium-and long-term planning.
Almona stated that key indicators for future rate reductions should include a trend of dis-inflation over at least two to three months, improved foreign exchange parameters and concrete signs of recovery in the real sector.
She, however, noted that the current MPR level remained prohibitively high for private sector development, particularly for Micro, Small, and Medium Enterprises (MSMEs).
“Moreover, it is increasingly clear that monetary policy alone cannot curb inflation that stems from structural and supply-side inefficiencies.
“Coordinated action with fiscal authorities is essential to address the root causes of inflation, such as insecurity, infrastructure deficits, and food supply disruptions,” she said.
Almona said that to cushion the real sector while maintaining price discipline, there must be consistency with reforms that support price stability through increased production in the real economy.
She called for the reinforcement of development finance initiatives by offering concessional rates to high-impact sectors such as manufacturing, agriculture, renewable energy, and power supply.
The LCCI DG also advocated transparency in bank lending rates to ensure that borrowers were not unfairly burdened by excessive spreads above the MPR.
“LCCI emphasises that the path forward must balance inflation containment with the urgent need to revitalise Nigeria’s productive economy.
“Now is the time for careful, data-informed monetary signalling coupled with strategic support for the real sector.
“We urge the Central Bank of Nigeria and the Federal Government to incorporate these perspectives into their policy decisions to foster sustainable growth and economic resilience,” she said.(NAN)
