CPPE urges CBN to prioritise real sector in monetary policy reform
By Esther Agbo
Stakeholders in Nigeria’s economic landscape have called on the Central Bank of Nigeria (CBN) to adjust its monetary policies to provide greater support to the real sector, especially manufacturers and farmers, who face crippling challenges under the current interest rate regime.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, highlighted this concern during a Networking and Breakfast Meeting organised by the Association of Corporate Treasurers of Nigeria (ACTN) in Lagos.
Yusuf warned that the high interest rates and currency depreciation since the reversion to orthodox monetary policy in 2023 are stifling productivity and growth in the real sector.
According to Yusuf, the apex bank’s policy is inadvertently rewarding speculative investors who benefit from tax-free gains in fixed-income instruments such as Treasury Bills and bonds, while the real sector struggles under soaring borrowing costs.
He expressed concern that with interest rates hovering over 32 per cent, industries like manufacturing and agriculture are unable to sustain operations or achieve profitability.
“The current policy being adopted by CBN seems to penalise people who are in production, which is counterproductive.
“Some investments in bonds and treasury bills are tax free while tax people are busy chasing manufacturers all over the places,” Yusuf explained.
The economic transition from unorthodox to orthodox policy, Yusuf said, has introduced severe shocks to businesses, with the lending rate now exceeding 34 percent.
He questioned whether the blanket application of market-driven policies which treats all sectors equally in terms of foreign exchange access and borrowing costs is truly appropriate for Nigeria’s diverse economic structure.
“Whether you are a manufacturer importing raw materials or a wealthy individual importing a limousine, both of you will be buying foreign exchange (FX) at the same rate. It is debatable if this model is the right thing?” Yusuf added.
