WorldStage– The Nigeria Employers’ Consultative Association (NECA) has commended the Central Bank of Nigeria (CBN) for reducing the Monetary Policy Rate (MPR), while warning about potential limitations of the decision.
NECA Director-General, Mr Adewale-Smatt Oyerinde said that the modest rate cut must translate into real economic benefits for households and businesses across Nigeria to have meaningful impact.
At its 302nd meeting, the Monetary Policy Committee (MPC) lowered the MPR by 50 basis points to 27 per cent and introduced new measures on cash reserve and liquidity requirements.
Oyerinde noted inflation had steadily declined, with headline inflation dropping to 20.12 per cent in August from 21.88 per cent in July, based on data from the National Bureau of Statistics.
“For over five months, inflationary pressures have eased.
“This provides critical space for policymakers to balance price stability with the urgent need to stimulate real economic growth,” Oyerinde said.
He warned that the impact of the rate cut would depend on effective transmission mechanisms.
He said without this, the intended boost to credit access and economic expansion might not materialise.
“If credit costs are lowered, businesses can access financing, expand operations, and create jobs.
“However, high cash reserve ratios may continue to constrain lending and undermine these expected outcomes,” he said.
In spite of overall inflation easing, Oyerinde highlighted that food inflation remained persistently high, putting pressure on household budgets and eroding the disposable income of average Nigerian families.
“Macroeconomic stability only becomes meaningful when Nigerians feel tangible relief, especially through lower food and living costs,” he emphasised, urging deeper economic reforms beyond monetary policy adjustments.
Oyerinde called on the government to complement monetary actions with fiscal reforms addressing exchange rate instability, insecurity in farming communities, and inefficiencies in energy and transport infrastructure.
“It is time to complement price stability with deliberate growth stimulation.
“This is the message Nigerians need right now to find relief from the ongoing cost-of-living crisis,” Oyerinde said.
