A major reduction in Nigeria’s benchmark interest rate will help lower borrowing costs and spur domestic investment, a pro-government advocacy group has said.
The Tinubu Media Support Group (TMSG) welcomed the Central Bank of Nigeria’s (CBN) decision to cut the Monetary Policy Rate (MPR) by 350 basis points, lowering it to 23% from 26.5%.
In a joint statement issued by Chairman Emeka Nwankpa and Secretary Dapo Okubanjo, the group described the reduction—the sharpest shift in benchmark rates this year—as a key catalyst to ensure citizens feel the tangible benefits of macroeconomic stabilization. The group noted that the monetary easing follows three consecutive months of falling headline inflation, alongside foreign exchange reserves reaching 18-year highs and an expanding current account surplus. ”The decision by the Central Bank of Nigeria to reduce Monetary Policy Rate by 350 basis points to 23 percent shows that the CBN had been cautious with its monetary policy,” the group said. “That the benchmark interest is the lowest since February 2024 reflects the improving macroeconomic environment.” Aligning with assessments from local business groups, including the Centre for the Promotion of Private Enterprise (CPPE), TMSG argued that lower borrowing costs will unlock capital for real-sector investments, enhancing domestic manufacturing and commercial capacity.
The group highlighted CBN Governor Olayemi Cardoso’s emphasis that the reduction serves as an operational adjustment to enhance monetary policy transmission across commercial banks. It also pointed to a newly signed Memorandum of Understanding (MoU) between the central bank and the Ministry of Finance to tighten coordination between fiscal and monetary policies. Urging the public to maintain confidence in the administration’s direction, TMSG stated that the policy shifts align with President Bola Tinubu’s broader economic target to expand Nigeria’s economy to $1tn (£750bn) by 2030.
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