Businesses Eye Relief: Manufacturers, SMEs Urge CBN to Cut Rates as MPC Meets Today
As Nigeria’s Monetary Policy Committee (MPC) reconvenes today in Abuja, manufacturers and business owners are strongly hoping for a cut in the country’s benchmark interest rate, which has been held at 27.5% throughout the first half of 2025.
This renewed call for a rate reduction comes amid gradual signs of economic recovery, with headline inflation easing for the second consecutive month — falling to 22.22% in June, from 22.97% in May, according to the National Bureau of Statistics (NBS).
Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria (MAN), stressed that businesses are in dire need of cheaper financing.
“With the MPR at 27.5%, manufacturers are borrowing at over 30–35%. That’s unsustainable. We’re not even expecting a hold — we need a cut to survive,” he emphasized.
Small business owners are feeling the heat too.
Dr. Femi Egbesola, President of the Association of Small Business Owners of Nigeria, backed the call for a modest cut of 50 to 100 basis points.
“Access to affordable credit is being stifled by high interest rates. While inflation has slowed, SMEs are still grappling with rising costs and limited funding.”
While core inflation (which excludes food and energy prices) stood at 22.76% year-on-year in June, its slight month-on-month uptick and persistent food inflation remain concerning.
Prices of essentials like tomatoes, meat, crayfish, and pepper surged in June — with food inflation rising to 3.25% (from 2.19% in May).
Dr. Muda Yusuf, Founder of the Centre for the Promotion of Private Enterprise, believes the CBN is likely to maintain the current rate, citing slow progress on several fronts:
“The inflation drop is marginal. Energy, logistics, and insecurity issues still persist. My wish is a cut, but my expectation is a hold.”
⚖️ Mixed Expectations from Analysts:
• Doves are rooting for a slight easing to encourage economic growth.
• Hawks are urging caution, warning that a premature cut could derail recent gains in exchange rate reforms and inflation control.
“The tone of the MPC’s communique will be key,” analysts at Comercio Partners noted.
️ Segun Kuti-George, Vice President of the Nigerian Association of Small-Scale Industrialists, expects no change in rates, highlighting the need to maintain dollar stability and inflation control.
Summary:
With inflation softening and the naira stabilizing, businesses across Nigeria — especially manufacturers and SMEs — are calling on the CBN to ease borrowing conditions by cutting interest rates. However, rising food prices, high operational costs, and cautious central bank sentiment may tilt the MPC towards maintaining the current stance.
Stay tuned for the outcome of the meeting, which could signal the CBN’s outlook on Nigeria’s economic direction for the rest of 2025.
As Nigeria’s Monetary Policy Committee (MPC) reconvenes today in Abuja, manufacturers and business owners are strongly hoping for a cut in the country’s benchmark interest rate, which has been held at 27.5% throughout the first half of 2025.
This renewed call for a rate reduction comes amid gradual signs of economic recovery, with headline inflation easing for the second consecutive month — falling to 22.22% in June, from 22.97% in May, according to the National Bureau of Statistics (NBS).
Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria (MAN), stressed that businesses are in dire need of cheaper financing.
“With the MPR at 27.5%, manufacturers are borrowing at over 30–35%. That’s unsustainable. We’re not even expecting a hold — we need a cut to survive,” he emphasized.
Small business owners are feeling the heat too.
Dr. Femi Egbesola, President of the Association of Small Business Owners of Nigeria, backed the call for a modest cut of 50 to 100 basis points.
“Access to affordable credit is being stifled by high interest rates. While inflation has slowed, SMEs are still grappling with rising costs and limited funding.”
While core inflation (which excludes food and energy prices) stood at 22.76% year-on-year in June, its slight month-on-month uptick and persistent food inflation remain concerning.
Prices of essentials like tomatoes, meat, crayfish, and pepper surged in June — with food inflation rising to 3.25% (from 2.19% in May).
Dr. Muda Yusuf, Founder of the Centre for the Promotion of Private Enterprise, believes the CBN is likely to maintain the current rate, citing slow progress on several fronts:
“The inflation drop is marginal. Energy, logistics, and insecurity issues still persist. My wish is a cut, but my expectation is a hold.”
⚖️ Mixed Expectations from Analysts:
• Doves are rooting for a slight easing to encourage economic growth.
• Hawks are urging caution, warning that a premature cut could derail recent gains in exchange rate reforms and inflation control.
“The tone of the MPC’s communique will be key,” analysts at Comercio Partners noted.
️ Segun Kuti-George, Vice President of the Nigerian Association of Small-Scale Industrialists, expects no change in rates, highlighting the need to maintain dollar stability and inflation control.
Summary:
With inflation softening and the naira stabilizing, businesses across Nigeria — especially manufacturers and SMEs — are calling on the CBN to ease borrowing conditions by cutting interest rates. However, rising food prices, high operational costs, and cautious central bank sentiment may tilt the MPC towards maintaining the current stance.
Stay tuned for the outcome of the meeting, which could signal the CBN’s outlook on Nigeria’s economic direction for the rest of 2025.