The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) to 27 percent, drawing mixed reactions from economists, financial analysts, and small business operators.
The decision, announced after the September meeting of the Monetary Policy Committee (MPC), represents the first downward adjustment in months, as the apex bank continues efforts to balance inflation control with economic growth.
Financial experts have largely applauded the move, noting that a cut in the benchmark interest rate could ease borrowing costs for commercial banks and encourage increased lending to productive sectors. They argue that lower rates will support investment, stimulate consumer spending, and signal a gradual shift towards monetary easing.
Dr. Oladipo Adeyemi, a Lagos-based economist, said the cut was “a necessary step in cushioning the impact of tight monetary conditions,” adding that it may boost liquidity and support recovery in sectors slowed by high credit costs.
However, reactions from small and medium-scale enterprises (SMEs) have been less enthusiastic. Many operators say that despite changes in the MPR, commercial lending rates remain prohibitively high, often compounded by hidden charges and stringent collateral requirements.
“Reducing the MPR is good on paper, but most SMEs will not feel the impact unless banks actually lower their lending rates,” said Mrs. Funmi Adebayo, a textile manufacturer in Aba. “For us, the cost of credit is still too expensive to expand our businesses.”
Some SME associations also expressed concern that inflationary pressures and foreign exchange instability may offset any short-term gains from the CBN’s policy shift.
Analysts believe the apex bank will need to complement the rate cut with broader financial reforms to ensure credit reaches businesses that drive job creation and growth. They also stress the importance of monitoring inflation, which has remained stubbornly high despite previous tightening measures.
The MPR — the rate at which the CBN lends to commercial banks — remains one of the bank’s primary tools for managing liquidity and controlling inflation. The latest decision marks a cautious attempt to stimulate growth while keeping inflationary risks in check.
