The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has expressed optimism that commercial lending rates in the country will decline in the near future, as macroeconomic conditions begin to stabilize.
Speaking at the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos, Cardoso acknowledged that the prevailing interest rates—currently ranging between 32% and 36%—pose significant challenges for businesses. However, he pointed to signs of easing inflation and improved efficiency in capital allocation as indicators that downward pressure on rates is likely in the months ahead.
Outlook for Businesses
According to Cardoso, the anticipated moderation in rates would provide much-needed relief for Nigerian businesses, particularly small and medium-sized enterprises (SMEs) struggling with the high cost of credit. “There is substantial potential for interest rates to decrease in the future,” he said, adding that the CBN remains committed to policies that foster growth while safeguarding price stability.
Policy Measures in Focus
The CBN governor explained that ongoing reforms aimed at stabilizing the exchange rate, curbing inflationary pressures, and deepening access to long-term financing are part of a coordinated effort to improve Nigeria’s investment climate. He stressed that as inflation eases and the financial system channels credit more efficiently, commercial banks would have the room to reduce their lending margins.
Industry Reactions
Business leaders at the forum welcomed the projection but urged the CBN to ensure that reforms translate into tangible relief for borrowers. Several participants noted that high financing costs have constrained expansion plans, weakened competitiveness, and reduced job creation in the private sector.
Economic analysts also cautioned that while the outlook is encouraging, sustained improvement would depend on consistent fiscal discipline, energy sector reforms, and improved infrastructure to lower the overall cost of doing business in Nigeria.
The Bigger Picture
Cardoso’s comments come amid heightened concern over Nigeria’s lending environment, which many stakeholders have described as one of the steepest in Africa. A potential decline in rates would not only ease the financial burden on businesses but also stimulate investment, enhance productivity, and support broader economic recovery.
