The Central Bank of Nigeria (CBN) has announced a reduction in benchmark interest rates in a move aimed at stimulating economic activity and easing access to credit. The decision, which comes amid concerns over high borrowing costs, is expected to provide some relief for businesses struggling with rising operational expenses and sluggish consumer demand.
However, the Organised Private Sector (OPS) has responded by calling for additional measures beyond the interest rate cut, insisting that real sector players require comprehensive credit relief to remain competitive. According to the OPS, high inflation, multiple taxation, foreign exchange volatility, and infrastructural challenges continue to undermine the ability of businesses to access affordable financing.
In a statement, representatives of the OPS commended the CBN for its latest policy shift but warned that the move alone may not translate into immediate benefits for manufacturers and small businesses. They stressed that unless commercial banks are compelled to align with the new directive, lending rates could remain beyond the reach of many enterprises.
The business community also urged the apex bank to prioritize special intervention funds targeted at critical sectors such as agriculture, manufacturing, and small and medium enterprises (SMEs). They argued that channeling low-interest credit into these sectors would help stimulate productivity, create jobs, and enhance Nigeria’s economic resilience in the face of global uncertainties.
Analysts have also noted that while lower interest rates can improve liquidity and encourage investment, the persistent structural challenges in Nigeria’s economy may blunt the impact. Without addressing the broader issues of infrastructure, policy inconsistency, and high energy costs, they cautioned, businesses may struggle to fully benefit from the monetary easing.
Meanwhile, some economists see the CBN’s move as a step toward boosting investor confidence and stabilizing the economy. They highlighted that access to cheaper credit could help reduce the financial strain on businesses, expand production capacity, and support consumer spending in the medium term.
As stakeholders continue to weigh the implications of the policy shift, attention will now focus on how commercial banks implement the new interest rate regime and whether the government will adopt complementary fiscal measures to provide the much-needed relief for Nigeria’s private sector.
