The House of Representatives Committee on National Planning and Economic Development has warned the Central Bank of Nigeria (CBN) against the unintended consequences of sustaining high interest rates in its fight against inflation.
Chairman of the Committee, Rep. Gboyega Nasiru (APC-Ogun), issued the warning yesterday in Abuja during an interactive session with the Statistician-General of the Federation and Chief Executive Officer of the National Bureau of Statistics (NBS), Mr. Adeyemi Adeniran.
Nasiru said the warning became necessary as the apex bank prepares to hold its 300th Monetary Policy Committee (MPC) meeting next week.
At its 299th MPC meeting held on February 19 and 20, 2025, the CBN retained the Monetary Policy Rate (MPR) at 27.5 per cent, maintaining a tight monetary stance aimed at curbing inflation.
The lawmaker, however, noted that while the President Bola Tinubu administration has undertaken bold, market-driven reforms that are beginning to yield positive results, there is growing concern that the current tight monetary stance could stifle key productive sectors of the economy.
He observed that the reforms had stabilised the macroeconomic environment, restored investor confidence, and boosted market indicators.
According to him, the capital market has surged by nearly 100 per cent over the past two years, while the CBN recorded its highest external reserves in more than three years.
He also disclosed that the apex bank posted a profit of N38.8 billion in its latest financials—a remarkable recovery from the N1.15 trillion loss reported in 2023.
But despite these gains, Nasiru warned that high interest rates are negatively affecting the manufacturing, agriculture, and Small and Medium Enterprises (SME) sectors—industries considered crucial for job creation.
The lawmaker said: “The Monetary Policy Rate (MPR) has been raised 10 times since January 2023, currently standing at 27.5 per cent—up from 16.5 per cent in 2023—in a bid to tackle demand-pull inflation.
“However, it appears the effectiveness of this policy has been undermined by structural bottlenecks and supply chain inefficiencies.
“It is therefore our view that, given the current economic landscape, the monetary authorities—at their meeting next week—should consider a more accommodative stance that supports both growth and employment,” Nasiru said.
Adeniran noted that the latest data released by the Bureau, covering the second quarter of 2024, reported an unemployment rate of 4.3 per cent, down from 5.3 per cent in the previous quarter.
He added that unemployment was more prevalent among females (5.1 per cent) than males (3.4 per cent), and higher in urban areas (5.2 per cent) compared to rural areas (2.8 per cent).
Adeniran further stated that young people face a relatively higher unemployment rate of 6.5 per cent, while 12.5 per cent of youth are not in employment, education, or training (NEET).
The Statistician-General also disclosed that the Q3 and Q4 2024 reports are currently being finalised and will soon be released to the public.
