The Centre for the Promotion of Private Enterprise has cautioned the Central Bank of Nigeria’s Monetary Policy Committee against raising interest rates further, warning that additional tightening could undermine the fragile economic recovery and intensify pressure on businesses and households.
The economic advocacy body issued the caution ahead of the MPC’s 305th meeting, where members are set to assess inflation trends, exchange-rate developments, and broader macroeconomic conditions.
In a statement released on Sunday and signed by its Chief Executive Officer, Dr. Muda Yusuf, the CPPE said the current economic climate remains too delicate to withstand further monetary tightening.
The CPPE said expectations ahead of the MPC meeting must be considered against the backdrop of escalating geopolitical risks, mounting fiscal pressures, and enduring structural challenges within the Nigerian economy.
“Expectations ahead of the forthcoming 305th meeting of the Monetary Policy Committee should be situated within the context of evolving domestic macroeconomic realities, heightened geopolitical uncertainties and emerging fiscal liquidity risks confronting the Nigerian economy,” the statement noted.
“The Nigerian economy remains fragile and structurally constrained. Further tightening of monetary conditions could significantly weaken credit expansion, dampen investment appetite and undermine the fragile recovery momentum within the real sector,” Yusuf stated.
“Excessively elevated interest rates also heighten the risks of loan defaults, weaken the financial sustainability of businesses and exacerbate sovereign debt service pressures,” the group added.
The organisation cautioned that continued aggressive monetary tightening could dampen industrial productivity, weaken private sector investment, slow job creation, and ultimately constrain overall economic growth.
The CPPE argued that Nigeria’s inflation problem is largely structural and supply-driven, rather than demand-induced, limiting the effectiveness of conventional monetary tightening in tackling the underlying causes of rising prices.
According to the group, inflationary pressures stem mainly from elevated energy and transportation costs, logistics bottlenecks, weak infrastructure, and production inefficiencies.
The organisation added that higher interest rates are already pushing up borrowing costs for businesses and households, stressing that tighter monetary policy is better suited to curbing demand-pull inflation than addressing supply-side shocks.
Nigeria’s headline inflation rose to 15.69% in April 2026, up from 15.38 per cent in March.
The CBN is expected to hold its 305th MPC meeting this week, with investors closely watching for signals on the next policy direction.
