The Centre for the Promotion of Private Enterprise (CPPE), one of Nigeria’s frontline organized private sector (OPS) advocacy groups, has commended the Central Bank of Nigeria (CBN) for retaining the benchmark monetary policy rate (MPR) and others as part of the decisions taken during the 305th Monetary Policy Committee (MPC) meeting concluded on Wednesday in Abuja.
The Director/Chief Executive Officer of CPPE, Dr. Muda Yusuf, in a Brief Note shared with our correspondent, described the apex bank’s decisions as pragmatic and well-calibrated response to prevailing economic realities.
According to him, the decision to retain the Monetary Policy Rate (MPR) at 26.5 percent, asymmetric corridor around the MPR, Cash Reserve Ratio (CRR) for 15 percent for merchant banks, 45 percent for deposit money banks, and 75 percent for non-Treasury Single Account (non-TSA) deposits, demonstrates the CBN management’s measured and increasingly sophisticated understanding of the inflation dynamics confronting the Nigerian economy.
According to the renowned economist, the committee’s decisions send a strong signal of policy maturity, strategic restraint, and confidence in Nigeria’s macroeconomic management, particularly amid heightened global uncertainty and rising geopolitical tensions.
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He maintained that current inflationary pressures were largely structural and externally induced, rather than driven by excessive domestic demand.
The CPPE boss clarified: “The intensifying geopolitical tensions involving Iran, Israel, and the United States have triggered fresh volatility in the global energy market, pushing up crude oil prices and transmitting severe cost pressures into domestic energy prices, transportation, logistics, and manufacturing operations.
“Monetary policy is a powerful stabilisation instrument, but it cannot repair supply chains, resolve geopolitical conflicts, or eliminate structural bottlenecks in production and distribution. Attempting to force down structural inflation solely through aggressive monetary tightening would amount to applying a monetary solution to a structural problem”,he added.
Yusuf pointed out that the decision to hold rates reflected a commendable recognition by the monetary authorities that excessive tightening could stifle productivity, weaken industrial recovery, dampen investment appetite, and undermine employment generation.
Noting that economies do not grow on the strength of high interest rates; they grow on the strength of productivity, enterprise, investment confidence, and policy coherence, Yusuf commended the CBN for its disciplined management of the monetary policy framework and the relative stability achieved in the foreign exchange market in recent months.
Describing the exchange rate stability as a critical anchor of macroeconomic confidence, improving investor sentiment, moderating imported inflation, enhancing planning predictability, and reducing speculative distortions in the market, the CPPE chief noted that the recent policy direction of the apex bank reflected a strategic transition from crisis management to confidence management, and a shift that is essential for restoring macroeconomic credibility and rebuilding investor trust in the Nigerian economy.
He also lauded the fiscal authorities for renewed commitment to fiscal consolidation and improved revenue performance, stressing that “the sustainability of macroeconomic stability ultimately depends on the quality of fiscal discipline. Rising revenues should translate into lower fiscal deficits, reduced dependence on debt financing, and stronger fiscal buffers.”
On the banking sector, the CPPE’s Director rated the CBN high on the seamless and non-disruptive implementation of the ongoing recapitalisation programme, noting that the process has not triggered systemic anxiety, depositor panic, bank failures, or significant erosion of shareholder confidence, but reflects regulatory maturity, stronger supervisory capacity, and effective management of transition risks by the apex bank.
Yusuf described the recapitalisation exercise as more than a banking reform initiative, pointing out that it is fundamentally aimed at building a stronger financial intermediation framework capable of supporting long-term industrialisation, infrastructure financing, and economic transformation.
To leverage the modest achievements of its policy measures for sustainable economic growth, he urged the CBN to sustain clear communication and continuous reassurance for banks still facing recapitalisation-related transitional challenges, stressing that depositor confidence remains essential to overall financial system stability.
On the CPPE’s concluding remarks on the CBN’s monetary policy decisions, Yusuf stressed: “Ultimately, the outcome of the 305th MPC meeting reflects a balanced and intelligent policy calibration, one that appropriately recognises that the ultimate objective of macroeconomic management is not merely to tame inflation statistics, but to create an environment that supports investment, productivity, competitiveness, industrialisation, and sustainable job creation.”
