KEY POINTS
- The Lagos Chamber of Commerce and Industry (LCCI) has commended the Central Bank of Nigeria (CBN) for reducing the Monetary Policy Rate (MPR) by 50 basis points to 26.50 per cent.
- LCCI Director-General Dr. Chinyere Almona described the cut as a shift from aggressive tightening to a stabilisation phase driven by 11 consecutive months of moderating inflation.
- The Chamber expects the rate cut to signal a pathway for reducing the cost of capital, particularly benefiting manufacturing, agro-processing, and renewable energy sectors.
MAIN STORY
The Lagos Chamber of Commerce and Industry (LCCI) has lauded the decision of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to reduce the Monetary Policy Rate (MPR) by 50 basis points to 26.50 per cent. LCCI Director-General, Dr. Chinyere Almona, stated on Tuesday that the decision marks a significant shift from aggressive monetary tightening toward stabilisation.
During its 304th meeting held from Feb. 23 to Feb. 24, the MPC also adjusted the asymmetric corridor to +50/-450 basis points around the MPR, while retaining the Cash Reserve Ratio (CRR) at 45 per cent for Deposit Money Banks and the Liquidity Ratio at 30 per cent.
Dr. Almona noted that Nigeria’s stabilisation phase is anchored on dis-inflation, exchange rate convergence, and improved supply-side conditions, with inflation moderating to 15.1 per cent in January.
While describing the rate cut as a critical confidence signal to the Organised Private Sector (OPS), she cautioned that businesses still require tangible relief in financing costs to restore production and preserve jobs. She highlighted that structural rigidities and high reserve requirements on banks might still blunt the impact of monetary easing on real-sector activity.
The Chamber called for a continued focus on addressing impediments in the business environment, specifically attracting foreign direct investment into critical sectors like renewable energy, transport logistics, and oil and gas. Almona also suggested that the government should leverage expected higher allocations from the recent Executive Order on direct revenue remittance by the NNPC to invest in infrastructure.
She expressed optimism that with firm coordination between monetary and fiscal authorities, the Nigerian economy could achieve a GDP growth rate above five per cent in the short term.
WHAT’S BEING SAID
- “We see the rate cut as a bridge from reform to results,” stated Dr. Chinyere Almona, Director-General of LCCI.
- Almona noted the shift in policy: “The decision showed a significant shift from aggressive monetary tightening to stabilisation.”
- Regarding the business impact, she added: “Businesses still require tangible relief in financing costs to restore production, expand capacity, and preserve jobs.”
WHAT’S NEXT
- LCCI will monitor the impact of the 50-basis-point cut on commercial lending rates to see if the “cost of capital” actually decreases for manufacturers.
- The Chamber will continue to push for the reinvestment of NNPC remittances into power supply and transport logistics.
- OPS members are expected to begin utilizing the Nigerian Customs Service’s recently launched digital single window to ease port transactions.
BOTTOM LINE
The Bottom Line is that the LCCI views the CBN’s rate cut to 26.50 per cent as a positive step toward economic stabilisation. While it signals a pathway to lower capital costs, the Chamber maintains that real-sector growth will depend on addressing structural rigidities and ensuring the gains from macroeconomic reforms reach productive industries.
 has lauded the decision of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to reduce the Monetary Policy Rate (MPR) by 50 basis points to 26.50 per cent. LCCI Director-General, Dr. Chinyere Almona, stated on Tuesday that the decision marks a significant shift from aggressive monetary tightening toward stabilisation.){kind=link}