The Centre for the Promotion of Private Enterprise (CPPE) has called on the Central Bank of Nigeria (CBN) Governor, Dr Olayemi Cardoso, to balance price stability with growth, raising concerns over the cash reserve ratio (CRR) and monetary policy rate (MPR) environment.
CPPE made the call in a statement on Sunday, September 21, by its Chief Executive Officer, Dr Muda Yusuf, a renowned economist.
The statement focused on reviewing Cardoso’s two-year leadership as CBN governor.
The Centre hailed Cardoso for undertaking comprehensive reforms aimed at restoring confidence, strengthening governance, and repositioning the financial system to support inclusive and sustainable economic growth.
It noted the dogged reforms to include liberalisation and unification of the foreign exchange (FX) market, strengthening of corporate governance, and financial system stability.
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However, the CPPE said CBN can balance price stability with growth by gradually adjusting the CRR and MPR downwards as inflation moderates to create a more enabling credit environment.
It suggested that the apex bank balanced its policy mix by complementing monetary tightening with supply-side measures to address structural inflation drivers.
Another recommendation is for the CBN to address structural financing gaps by targeting interventions, including developing credit guarantee schemes and concessionary financing programmes for small and medium-sized enterprises (SMEs) and critical sectors of the economy.
The CPPE said long-term funding can promote development finance instruments and deepen the domestic bond market to mobilise resources for infrastructure.
It urged the CBN to sustain governance and transparency gains through institutionalising reforms, including entrenching corporate governance standards to ensure continuity beyond current leadership.
CPPE said the independence of the CBN will strengthen legal frameworks that protect its autonomy from political pressures.
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It further urged the CBN to enhance policy communication through transparency, including maintaining clear and predictable policy communication to manage market expectations and broadening consultation with industry players and development partners to foster inclusive decision-making.
“The leadership of Mr Yemi Cardoso has brought about a significant transformation of Nigeria’s financial system, with gains in transparency, credibility, and stability.
“The next phase of reform must focus on achieving a more balanced policy stance that supports growth while preserving macroeconomic stability.
“Addressing structural financing gaps and sustaining governance reforms will be critical for unlocking the financial sector’s full potential as a driver of inclusive economic development,” the CPPE stated.
The Centre pointed out that emerging concerns under the Cardoso leadership include aggressive monetary tightening.
It said that while it is necessary to combat inflation, the current stance is highly restrictive.
It noted that the MPR at 27.5 per cent and CRR at 50 per cent have considerably pushed up the cost of funds.
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CPPE stressed that credit constraints, which include elevated lending rates, have suppressed private sector borrowing, particularly in manufacturing, agriculture, SMEs, real estate and other sectors.
‘There is a growing risk that private investment could be displaced by high-yield government instruments,’ it warned.
Another emerging issue the CPPE noted is response to market failures, in which it said that a fully market-based approach, while improving efficiency, has not addressed structural financing gaps.
The gaps include that SMEs are faced with limited access to affordable credit, adding that long-term capital, including infrastructure, industrial, agricultural, construction, and real estate projects, lacks patient capital and affordable long-term funding mechanisms.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
