The Centre for the Promotion of Private Enterprise (CPPE) has welcomed the Central Bank of Nigeria’s (CBN) decision to cut the Monetary Policy Rate (MPR) by 50 basis points to 26.5 percent, describing it as a positive signal for growth.
In a policy brief released on Tuesday, CPPE noted that the reduction, announced by CBN Governor Olayemi Cardoso, reflects a gradual shift from aggressive monetary tightening toward measured easing, signalling confidence in the economy’s stabilisation trajectory.
“By consolidating recent stability gains and cautiously pivoting toward growth, the MPC’s decision supports investor sentiment, private-sector confidence, and prospects for credit expansion,” the policy brief said.
Join our WhatsApp ChannelThe think-tank highlighted that the easing is underpinned by improving macroeconomic fundamentals, including eleven consecutive months of declining headline inflation, strengthened foreign reserves, relative exchange-rate stability, and a better trade balance.
However, CPPE cautioned that the benefits of the rate cut may be limited unless structural challenges in monetary transmission are addressed. Despite the MPR reduction, lending rates remain high for businesses due to factors such as elevated deposit costs, a high Cash Reserve Ratio, government borrowing pressures, and banking system operating costs.
The brief also stressed the importance of fiscal discipline, noting that Nigeria’s high public debt and persistent deficits could undermine monetary easing. CPPE called for stronger non-oil revenue mobilisation, expenditure rationalisation, and reduced dependence on high-cost domestic borrowing to safeguard macroeconomic stability.
On investment opportunities, CPPE said the easing cycle could benefit equities, fixed income, manufacturing, agro-processing, SMEs, and private equity, particularly if exchange-rate stability and reserve growth are sustained.
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“Monetary policy is moving in the right direction, but for its full benefits to reach the real economy, stronger policy transmission and credible fiscal consolidation are essential,” Dr. Muda Yusuf, CPPE’s Chief Executive Officer, said.
Prosper Okoye is a Correspondent and Research Writer at Prime Business Africa, a Nigerian journalist with experience in development reporting, public affairs, and policy-focused storytelling across Africa
