Economists at the Centre for the Study of Economies of Africa (CSEA), a think tank with focus on emerging developments in African economies, have charged the Central Bank of Nigeria (CBN) to consider fiscal and other policy measures as complementary to its sustained efforts aimed at stabilizing the financial system, thawing inflation, and boosting the performance of the nation’s economy.
The analysts, in the firm’s “Nigeria Economic Update Issue 29’ published on August 22, which partly appraised the decision taken at the last meeting of the apex bank Monetary Policy Committee (MPC), noted that the decision to maintain the current monetary policy stance by the committee members indicated the Committee’s commitment to consolidate the recent disinflation trend and mitigate persistent price pressures in the economy.
Specifically, they recalled that MPC retained key parameters of the previous policy stance, including the Monetary Policy Rate (MPR), retained at 27.50 per cent; the asymmetric corridor maintained at +500/-100 basis points around the MPR; the Cash Reserve Ratio (CRR) at 50.00 per cent for Deposit Money Banks and 16.00 per cent for Merchant Banks; and the Liquidity Ratio at 30.00 per cent.
According to the CSEA experts, the committee’s decision signalled the CBN’s cautious approach, prioritising price stability while closely monitoring the impacts of past rate hikes on inflation, credit, and economic growth.
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They maintained that by holding rates steady, the MPC aimed to allow previous tightening measures to continue filtering through the system while avoiding excessive tightening that could stifle investment and consumption.
The economists, however, pointed out that to ensure price stability and restore real sector momentum, the apex bank “must strengthen monetary policy transmission mechanisms, tighten coordination with fiscal authorities, and intensify data-driven policies.”
Similarly, the CSEA researchers also advocated the need for the CBN to closely track credit flows to productive sectors and accelerate structural reforms to ease supply-side constraints.
