By Ayo Kehinde
The Centre for the Promotion of Private Enterprise (CPPE) has urged the Central Bank of Nigeria (CBN) to refrain from further interest rate hikes, warning that additional monetary tightening could slow economic recovery and deepen financial pressure on businesses and households.
The caution comes ahead of the Central Bank’s 305th Monetary Policy Committee (MPC) meeting scheduled for this week, where policymakers are expected to assess inflation trends, exchange-rate stability, and broader macroeconomic conditions.
CPPE Chief Executive Officer, Dr Muda Yusuf, said Nigeria’s economy remains too fragile to withstand another round of aggressive tightening.
According to the group, expectations surrounding the MPC meeting should be viewed against the backdrop of mounting geopolitical uncertainties, fiscal pressures, and persistent structural challenges facing the economy.
“The Nigerian economy remains fragile and structurally constrained. Further tightening of monetary conditions could significantly weaken credit expansion, dampen investment appetite, and undermine the fragile recovery momentum within the real sector”, Yusuf said.
The CPPE also warned that excessively high interest rates could increase the risk of loan defaults, weaken the financial sustainability of businesses, and worsen sovereign debt service obligations.
The organisation argued that Nigeria’s inflationary pressures are largely supply-driven rather than demand-induced, making conventional monetary tightening less effective in addressing the root causes of rising prices.
It identified key drivers of inflation as high energy costs, rising transportation expenses, logistics bottlenecks, weak infrastructure, and production inefficiencies.
According to the group, higher borrowing costs are already increasing financing burdens for businesses and consumers, with potential consequences for industrial productivity, private-sector investment, employment generation and overall economic growth.
The CPPE called for a more pragmatic and context-sensitive monetary policy approach capable of balancing inflation control with economic growth and job creation.
Nigeria’s headline inflation rate rose to 15.69 percent in April 2026 from 15.38 percent in March. At its last meeting, the CBN reduced the Monetary Policy Rate by 50 basis points to 26.5 percent.
