By John Joseph
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The Centre for the Promotion of Private Enterprise (CPPE) has expressed concerns over the Central Bank of Nigeria’s (CBN) decision to raise the interest rate to 27.50 per cent. According to the CPPE, this move will worsen the imbalances in the country’s real sectors, including manufacturing, agriculture, real estate, air transport, and textile.
The CPPE’s director, Muda Yusuf, stated that the CBN’s hawkish stance is troubling, given the declining growth recorded in critical sectors of the economy. Nigeria’s 3.46 per cent growth in domestic product in the third quarter of 2024 highlights the disconnect between the financial services sector and the real economy.
The financial services sector recorded a growth of 32 per cent, while agriculture and manufacturing grew by 1.14 per cent and 0.92 per cent, respectively. This disparity is alarming, and the CPPE believes that the CBN’s decision will only exacerbate the issue.
The CPPE urged the CBN to provide monetary and fiscal support to strategic economic sectors, rather than raising interest rates. These sectors, including agriculture, manufacturing, and real estate, are in dire need of support to stimulate growth and development.
In addition, the CPPE recommended that the CBN upscale its support for development finance institutions to address the financing challenges created by the sustained tight monetary policy. regime.
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