As the Central Bank of Nigeria (CBN) prepares for its milestone 300th Monetary Policy Committee (MPC) meeting scheduled for next week, federal lawmakers have issued a cautionary note against further increases in the Monetary Policy Rate (MPR), which currently stands at 27.5%.
The advisory comes amid growing concerns about the impact of high interest rates on key sectors of the Nigerian economy, including manufacturing, agriculture, and small and medium enterprises (SMEs)—sectors identified as major contributors to employment.
Speaking during an official engagement with the Statistician-General of the Federation and Chief Executive Officer of the National Bureau of Statistics (NBS), Mr. Adeyemi Adeniran, the Chairman of the House of Representatives Committee on National Planning and Economic Development, Hon. Gboyega Nasir Isiaka, emphasized the need for caution in further tightening monetary policy.
“The CBN’s policy interventions have yielded some encouraging outcomes, including signs of economic stabilization and improving investor confidence,” Hon. Isiaka said.
“However, the successive increases in the MPR—ten adjustments since January 2023, moving from 16.5% to 27.5%—have placed significant strain on productive sectors of the economy.”
He noted that despite the CBN’s intention to curb inflation, the impact of structural bottlenecks, supply chain challenges, and other systemic inefficiencies have continued to blunt the effectiveness of monetary tightening.
“It is our view that the monetary authorities, in considering next steps at the upcoming MPC meeting, adopt a more balanced and growth-friendly approach that also supports job creation and sustainable economic development,” Isiaka stated.
At the February 2025 meeting—the Committee’s 299th—the CBN, under the leadership of Governor Olayemi Cardoso, opted to hold the MPR steady at 27.5%, maintaining the rate set at the November 2024 meeting.
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During the session, NBS boss Mr. Adeyemi Adeniran presented recent labor market statistics, revealing that Nigeria recorded an unemployment rate of 4.3% in Q2 2024, an improvement from 5.3% in Q1.
Despite the overall decline, disparities persist. Female unemployment was recorded at 5.1% compared to 3.4% for males, while urban areas reported a higher unemployment rate of 5.2% versus 2.8% in rural locations.
Youth unemployment also remains a concern, with a rate of 6.5%, and 12.5% of Nigerian youths classified as not in employment, education, or training (NEET). This group included a higher proportion of young females (14.3%) than males (10.9%).
Adeniran noted that the Q3 and Q4 2024 labor force survey reports are currently being finalized and would be made public upon completion.
The MPC, comprising 12 members including the CBN Governor as Chairman, is tasked under the CBN Act of 2007 with setting monetary policy parameters aimed at achieving price stability.
Key indicators monitored by the Committee include inflation (which remains above the bank’s target), GDP growth, foreign exchange performance, and the coordination of fiscal and monetary policies.
As Nigeria looks to consolidate recent gains in macroeconomic stability, the outcome of the CBN’s 300th MPC meeting is expected to be a key signal to investors and stakeholders alike.