…seeks reduction in MPR
The Lagos Chamber of Commerce and Industry (LCCI) has called for sustainable market-driven reforms that drive price stability by stimulating production and investment in the real economy.
In a statement signed by Chinyere Almona, director general of LCCI, the chamber stated that while they appreciate that the current reforms may have started to have some impact on stabilising the exchange rates, easing headline inflation, and increasing government revenue, they must restate that interest rate at 27.5 percent remains a depressing burden on businesses.
As the Central Bank of Nigeria’s Monetary Policy Committee (MPC) convenes for its scheduled third meeting in 2025, the LCCI called for a reduction in the Monetary Policy Rate (MPR).
“Having examined key economic indicators, including inflation dynamics, exchange rate movements, fiscal developments, and global monetary trends, we may expect to see a possible hold on the MPR by the Committee,” LCCI stated.
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The chamber also emphasised the need for the MPC to strike a careful balance between preserving macroeconomic stability and supporting economic recovery, especially in light of the extension of the capital expenditure component of the 2024 federal budget to December 2025.
“The ongoing structural reforms and evolving domestic and external economic conditions are factors to be considered,” said chamber urged the MPC committee.
“We estimate that this budget extension could increase liquidity in the system as more capital funds are released, potentially exacerbating inflationary pressures,” the LCCI said the committee should consider this.
To support the real sector while maintaining price stability, the LCCI recommended strengthening development finance interventions through concessional funding to high-impact sectors like manufacturing, agriculture, renewable energy, and power, noting that Nigerian businesses and households continue to grapple with high operating and living costs, increasing the cost of credit.
The chamber also urged the MPC to enhance transparency in lending practices to ensure that borrowing costs are fair and that banks do not impose excessive margins over the MPR.
“Stabilise the foreign exchange market by closing arbitrage windows, improving liquidity, and rebuilding investor confidence,” the LCCI said, while noting that these are critical steps toward curbing imported inflation and supporting long-term economic stability.
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They also stated that development finance institutions such as the Development Bank of Nigeria, Bank of Agriculture, NEXIM Bank, and the Bank of Industry should be better resourced and aligned with industrial growth priorities.
“We recognise that the current interest rate environment is tight, making access to credit above the affordability of small businesses, and the private sector is being crowded out of funding.
“We therefore urge the Central Bank to complement its conventional policy tools with targeted, non-cash measures in the form of concessionary interest rates to small businesses,” the LCCI stated, adding that a coordinated approach with fiscal authorities is essential to resolving key drivers of inflation such as insecurity, infrastructure deficits, and disruptions in food supply chains.
In preparation for a new tax system coming with new rates and administration, the chamber advised that the fight against inflation is sustained at this time with managed rate cuts before the end of the year.
