NECA Commends CBN’s Policy Shift, Calls For Stronger Support For Real Sector

The director general of Nigeria Employers’ Consultative Association (NECA), Adewale-Smatt Oyerinde
has applauded the decision of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), on the reduction of the Monetary Policy Rate (MPR) from 27.0 per cent to 26.5 per cent at its 304th meeting.
The DG in a statement on Tuesday said the marginal reduction in the benchmark interest rate represents a cautious but noteworthy signal that monetary authorities are beginning to respond to the sustained pressures facing businesses and the productive sector.
According to him, while the 50 basis point reduction may not immediately translate into significantly lower lending rates, it reflects a gradual shift toward supporting economic growth without undermining price stability.
The NECA boss reiterated that the overall policy stance remains tight, given the retention of the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks, alongside the maintenance of the liquidity ratio at 30 per cent and the asymmetric corridor around the MPR.
He noted that with a substantial portion of bank deposits still sterilised, the capacity of financial institutions to expand credit to the real sector may remain constrained in the near term.
Oyerinde noted that the decision reflects a careful balancing act aimed at moderating inflation while avoiding excessive strain on businesses already grappling with high operating costs, exchange rate volatility, and weakened consumer demand.
He stressed that inflation, particularly in food, energy, and transportation, continues to pose significant challenges to employers and households alike.
He further stated that for the modest easing in policy rate to have meaningful impact, it must be complemented by coordinated fiscal and structural reforms that address supply-side constraints, improve infrastructure, and enhance productivity.
He urged financial institutions to ensure that the slight reduction in the MPR is gradually reflected in lending conditions for manufacturers, SMEs, and other productive enterprises.

Moreover, Oyerinde affirmed that while the MPC has not fully relaxed its tightening stance, the reduction in the MPR signals cautious optimism. He added that sustained improvements in inflation trends, exchange rate stability, and investor confidence will be critical in determining the scope for further monetary easing that supports growth, investment, and employment generation in the Nigerian economy.