Nigeria’s decision to keep interest rates at historic highs is triggering fresh warnings about slowing growth, weakening credit, and rising business strain.
The Central Bank of Nigeria kept the Monetary Policy Rate at 27%, insisting that high rates are still necessary to control inflation. But business leaders warn the prolonged tightening may now be hurting growth. CPPE CEO Dr. Muda Yusuf said the MPC missed a chance to support recovery, noting that a small cut “would not have jeopardised price stability” but could ease the credit squeeze.
Analysts also point to the large gap between inflation at 16% and the 27% benchmark rate. Consultant Thomas Amusan called the spread “economically distortive,” arguing it keeps borrowing costs abnormally high and discourages private investment.
SMEs are feeling the worst impact, with lending rates between 33% and 45%. Manufacturers like Sharon Nwosu say expansion is now “impossible.” While some experts argue the CBN is prioritising price stability and investor confidence, private-sector credit continues to fall as banks shift lending toward government borrowing.
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