Business leaders and economists have predicted that the Central Bank of Nigeria (CBN) is likely to keep its Monetary Policy Rate (MPR) at 26.5 per cent during the Monetary Policy Committee (MPC) meeting scheduled for Monday and Tuesday.
Although many Nigerians and businesses are hoping for a reduction in interest rates, experts believe rising global uncertainties, especially tensions in the Middle East, may force the CBN to maintain its current policy.
The expectation comes after the CBN’s latest Inflation Expectations Survey showed that 61.1 per cent of Nigerians want interest rates reduced. Many believe lower rates would make loans cheaper, encourage investments, and support business growth, particularly in the manufacturing sector.
However, economists say the current global situation makes it risky for the apex bank to cut rates too soon.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the recent conflict involving the United States and Iran has increased uncertainty in the global economy. According to him, the crisis has pushed up crude oil prices to over 84 dollars per barrel, raising concerns about higher inflation.
Yusuf explained that increasing energy prices usually lead to higher transportation and production costs, which eventually result in rising prices of goods and services. Because of this, he believes the CBN is more likely to keep the interest rate unchanged rather than reduce it.
He noted that while he personally supports lower interest rates because borrowing costs remain too high, the current global environment requires caution. He also said there is little chance of another rate increase since Nigeria’s latest inflation figures showed only a slight slowdown.
The President of the Lagos Chamber of Commerce and Industry (LCCI), Leye Kupoluyi, also said businesses are eager to see lower interest rates. According to him, borrowing has become very expensive, making it difficult for companies to expand their operations.
Kupoluyi explained that cheaper loans would allow businesses to plan better, invest in growth, and rely less on costly short-term financing. He added that reducing borrowing costs would also help lower production expenses, which could eventually benefit consumers through more affordable goods and services.
Despite this, he advised businesses to wait for the MPC’s final decision before making expectations.
A Professor of Economics and Public Policy at the University of Uyo, Prof. Akpan Ekpo, also expects the committee to maintain the current rate. He said the uncertainty surrounding the US-Iran conflict makes it difficult to predict how global inflation will behave in the coming months.
Ekpo warned that if inflation rises further due to higher energy prices, the CBN may even consider increasing interest rates in the future to control rising prices. Instead of relying only on monetary policy, he urged the government to focus more on supporting the manufacturing sector to create jobs and boost production.
The Chief Executive Officer of Economic Associates, Dr. Ayo Teriba, agreed that businesses and households would welcome lower interest rates. He pointed out that Nigeria’s exchange rate has remained relatively stable, while inflation has stayed around 15 per cent for several months.
However, Teriba said the MPC has access to economic data that is not available to the public, making it difficult for outsiders to accurately predict its decision. He added that while he would like to see both the Monetary Policy Rate and the Cash Reserve Ratio reduced, he prefers to wait for the committee’s official announcement.
For several months, businesses have argued that high interest rates are limiting investment, especially in the manufacturing sector. Industry operators say affordable long-term loans are essential for expanding production, creating jobs, and strengthening Nigeria’s economy.
As the MPC begins its meeting, many investors and business owners will be watching closely to see whether the CBN prioritises controlling inflation or providing relief through lower borrowing costs.
