REPS WARN CBN OF RISKS TIED TO HIGH INTEREST RATES……..
By: Safiya Abdulrahim Dabban
The House of Representatives Committee on National Planning and Economic Development has cautioned the Central Bank of Nigeria (CBN) about the potential negative impact of sustained high interest rates intended to combat inflation.
Committee Chairman, Hon. Gboyega Nasiru, issued the warning during a meeting with the Statistician-General of the Federation and CEO of the National Bureau of Statistics (NBS), Mr. Adeyemi Adeniran.
Nasiru emphasized that the caution is timely, ahead of the CBN’s upcoming 300th Monetary Policy Committee (MPC) meeting scheduled for early next week. He noted that while the current administration’s market-oriented reforms are starting to show positive outcomes—including economic stabilization and renewed investor confidence—concerns remain.
He pointed out that the capital market has doubled in value over the past two years, and the CBN has recorded its highest level of external reserves in more than three years. Additionally, the apex bank posted a profit of N38.8 billion, marking a dramatic turnaround from its N1.15 trillion loss in 2023.
Despite these gains, Nasiru expressed concern that persistently high interest rates are hurting key sectors such as manufacturing, agriculture, and small and medium enterprises (SMEs), which are essential for job creation.
“The Monetary Policy Rate (MPR) has been raised 10 times since January 2023, rising from 16.5% to the current 27.5%,” he said. “Yet, the impact of these hikes seems to be weakened by structural challenges and supply chain disruptions.”
He urged the CBN to adopt a more balanced policy stance that fosters both economic growth and employment.
In his response, NBS Chief Adeyemi Adeniran shared that Nigeria’s unemployment rate dropped to 4.3% in Q2 2024, down from 5.3% in the previous quarter. However, he noted that unemployment remains higher among women and in urban areas compared to their male and rural counterparts.
Adeniran also mentioned that data for Q3 and Q4 2024 are being finalized and will be released soon.