The Nigeria Employers’ Consultative Association (NECA) has welcomed the Central Bank of Nigeria’s decision to reduce its benchmark interest rate, describing the move as a cautious but important step toward easing mounting pressure on the productive sector.
Reacting to the outcome of the 304th Monetary Policy Committee (MPC) meeting, NECA’s Director-General, Adewale-Smatt Oyerinde, said the decision to lower the Monetary Policy Rate (MPR) from 27.0 percent to 26.5 percent signals that monetary authorities are beginning to acknowledge the sustained strain facing businesses across the country.
While the 50 basis point adjustment may not immediately drive down borrowing costs for companies, Oyerinde noted that it reflects a gradual recalibration of policy toward supporting growth without jeopardising price stability.
Despite the rate cut, NECA observed that the broader monetary environment remains restrictive. The Cash Reserve Ratio (CRR) for commercial banks was maintained at 45 percent, alongside a liquidity ratio of 30 percent and the asymmetric corridor around the MPR. According to the association, these parameters indicate that a significant share of banking sector deposits remains locked within the system, potentially limiting credit expansion to manufacturers and other productive enterprises in the short term.
Oyerinde stressed that the MPC’s decision reflects a delicate balancing act—curbing inflationary pressures while preventing further distress for businesses already battling rising operational expenses, exchange rate fluctuations, and weak consumer purchasing power.
He highlighted persistent inflationary pressures in food, energy, and transportation as key burdens affecting employers and households alike. These cost pressures, he argued, continue to erode margins and undermine investment capacity within Nigeria’s real sector.
NECA further maintained that for the interest rate reduction to generate meaningful economic impact, monetary easing must be accompanied by coordinated fiscal interventions and structural reforms. According to Oyerinde, supply-side improvements—particularly in infrastructure, logistics, and productivity enhancement—are essential to ensure that businesses can translate improved financial conditions into sustainable growth and job creation.
He called on financial institutions to reflect the MPR reduction in lending rates over time, especially for manufacturers, small and medium-sized enterprises (SMEs), and other growth-driving segments of the economy.
Although the central bank has not fully abandoned its tightening stance, NECA described the rate cut as a cautiously optimistic development. The association emphasized that continued moderation in inflation, improved exchange rate stability, and strengthened investor confidence will determine whether further monetary easing becomes feasible in the months ahead.
Ultimately, NECA believes that sustained policy coordination will be critical in unlocking credit flows, stimulating private-sector investment, and supporting employment growth within Nigeria’s evolving economic landscape.
 has welcomed the Central Bank of Nigeria’s decision to reduce its benchmark interest..){kind=link}