Ahead Of The 300th MPC meeting, Reps Caution CBN About The Effects Of High Interest Rates

• Within two years, the CBN Monetary Policy Committee raised interest rates 10 times, triggering pressures on businesses of all sizes
• The Reps committee on national planning has urged the CBN to think twice before deciding at the next MPC meeting
• The National Bureau of Statistics has revealed that unemployment figures only declined slightly in 2024

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

The Federal House of Representatives Committee on National Planning and Economic Development has sent an important message to the Central Bank of Nigeria (CBN).

The Committee stated that it was important to issue this note of caution ahead of the 300th Monetary Policy Committee (MPC) meeting.

Gboyega Isiaka, chairman of the committee, called on the apex bank to consider the effect the high interest rates had on business in Nigeria.

Isiaka stated this at a meeting with the statistician-general of the federation and the chief executive officer of the National Bureau of Statistics (NBS), Prince Adeyemi Adeniran.

He pointed out that even though the MPC decided to raise interest rates to curb inflation in Nigeria, the decision had unintended consequences on both small and medium enterprises (SMEs), agricultural businesses, and manufacturers.

These players are all key drivers of employment, and this impact is reflected in Nigeria’s unemployment figures.

CBN holds interest rates at 299th MPC meeting

At the 299th MPC meeting, the committee took the bold decision to hold interest rates at 27.5%. This move halted the hiking of interest rates which started in January 2023.

In two years, the committee had raised the rates 10 times, taking it from 16.5% to 27.5%, but inflation did not moderate, even though there was a gradual return of investor confidence in the Nigerian capital market.

Isiaka pointed out that bold move was undermined by structural bottlenecks and supply chain efficiency. He urged the CBN to take on a more accommodative monetary stance that will promote growth and employment generation across sectors.

Isiaka commended the CBN on its N38.8 billion profit in 2024, describing it as an impressive recovery coming after a N1.15 trillion loss.

NBS reports 4.3% unemployment rate in Q2 2024

Earlier in his remarks, Adeniran disclosed that Nigeria’s unemployment rate dropped to 4.3% in Q2 2024 from 5.3% in Q1.

Explaining further, he said unemployment was higher among females than males (5.1% and 3.4%), and also higher in urban areas than in rural areas (5.2% and 2.8%), the CABLE reports.

Adeniran also disclosed that about 12.5% of the youths were neither in gainful employment nor training of any sort, with the figure being higher among females than males.

65% of Nigerians want CBN to reduce interest rates

In related news, 65% of Nigerian households want the Central Bank of Nigeria to reduce interest rates, as they believe it would help speed up economic recovery.

This is one of the findings contained in the new CBN Household Expectations Survey conducted in February 2025, Legit.ng reported.

The respondents noted that lower interest rates would translate to improved finances for both households and businesses and trigger economic growth and stability.

Source: Legit.ng