Members of the Organised Private Sector (OPS) have expressed fears that Nigeria’s rising inflation could kill the chances of reducing the country’s high interest rate.
According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation climbed to 24.23% in March 2025, up from 23.18% recorded in February.
This is the first time inflation is rising again since the Consumer Price Index was rebased in January 2025, which had initially brought it down from 34.80% to 24.48%.
Before now, OPS members had urged the Central Bank of Nigeria (CBN) to signal support for economic growth by cutting the interest rate at its upcoming Monetary Policy Committee meeting on May 19–20. Nigeria’s MPR (Monetary Policy Rate) has stayed at 27.5% — one of the highest rates globally.
But with inflation on the rise again, OPS members like the Manufacturers Association of Nigeria (MAN) and Lagos Chamber of Commerce and Industry (LCCI) fear a rate cut is now unlikely.
MAN’s Director-General, Segun Ajayi-Kadir, said manufacturers suffered high borrowing costs in 2024, with lending rates reaching 35.5% due to the high MPR, leading to N1.3tn in finance costs that stifled investment and expansion.
Similarly, LCCI President, Gabriel Idahosa, said hopes for a lower interest rate have dimmed. He warned that ongoing global trade disruptions and a weak naira could worsen inflation, especially in food, energy, and logistics sectors.
“Headline inflation rising again may wipe out hopes of an interest rate cut,” Idahosa said. He urged the government to continue boosting food production and strengthen the national emergency on food security.
Meanwhile, Dr Femi Egbesola, President of the Association of Small Business Owners of Nigeria (ASBON), said rising inflation is a big threat to the real sector. He warned that higher costs are shrinking profit margins and making long-term business planning almost impossible.
Egbesola called on the government to align monetary and fiscal policies to tame inflation, stabilize the exchange rate, and lower energy costs. He also urged targeted support for small businesses through low-interest financing and tax relief.
Taking a deeper look, Dr Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), said exchange rate pressures, high energy costs, and insecurity are major inflation drivers.
He explained that many businesses are now pushed to Band A for electricity, causing higher energy bills. Yusuf stressed the need for urgent reforms in the power sector and moderate electricity tariff adjustments to improve liquidity.
He added that the oil and gas sector must ramp up domestic refining to stabilize fuel supply, while forex stability must be supported by increasing oil production and boosting non-oil exports.
“The real solution is to fix power, oil, and forex challenges urgently,” Yusuf said.
