The Centre for the Promotion of Private Enterprise (CPPE) has applauded the Central Bank of Nigeria’s (CBN) latest monetary policy moves, describing them as a strategic and well-timed intervention to boost growth and unlock private sector financing after months of aggressive tightening.

At its September Monetary Policy Committee (MPC) meeting, the apex bank cut the Monetary Policy Rate (MPR) by 50 basis points to 27 per cent from 27.5 per cent and adjusted the asymmetric corridor to +250/-250 basis points around the benchmark rate.

In a further push to ease credit conditions, the MPC also lowered the Cash Reserve Ratio (CRR) for commercial banks by 500 basis points to 45 per cent, retained the merchant banks’ CRR at 16 per cent, and left the liquidity ratio unchanged at 30 per cent. This move is likely to facilitate fresh investment flows into multiple sectors.

To contain potential liquidity shocks from government spending, the committee introduced a 75 per cent CRR on non-Treasury Single Account (TSA) public sector deposits, a measure aimed at curbing fiscal-driven excess money supply that could destabilize prices.

CPPE, in a statement signed by its Director/CEO, Dr. Muda Yusuf, said the policy shift comes on the back of five consecutive months of declining inflation, evidence that earlier rate hikes have helped stabilise the macroeconomic environment.

“Having restored a measure of price stability, the MPC’s pivot toward growth is both logical and timely,” the statement reads.

Yusuf noted that high interest rates over the past year have choked private sector credit, raised borrowing costs, and slowed business expansion.

The reduction in MPR and CRR, he explained, should improve liquidity in the banking system, lower lending rates, and free up capital for productive sectors of the economy.

Analysts say the easing cycle could unlock new investment flows into the capital market and spur fresh lending by banks. With lower benchmark rates, government securities may offer reduced yields, making equities more attractive to investors seeking higher returns.

The CRR cut is also expected to release significant funds to commercial lenders, expanding their capacity to finance small and medium-sized enterprises (SMEs) and other private ventures. Consequently, fresh investment flows could be bolstered by these measures.

“The combination of lower rates and increased liquidity will stimulate credit creation and support economic activity,” Yusuf said. “This is good news for businesses seeking affordable funding to expand operations and create jobs.”

Despite welcoming the CBN’s bold step, CPPE warned that monetary policy alone cannot drive sustainable growth.

It urged the federal government to complement the rate cuts with targeted fiscal measures, including sustained fiscal consolidation to maintain investor confidence, greater investment in critical infrastructure to reduce production costs, and stronger regulatory frameworks to attract domestic and foreign capital.

The group also called for decisive action on insecurity, which continues to discourage private investment and limit rural productivity.

The MPC’s decision is observed to be a signal of a broader policy transition from economic stabilization to growth acceleration. If supported by structural reforms, the move could spur higher output, strengthen corporate earnings, broaden the tax base, and sustain the recent downward trend in inflation.

“This is a shot in the arm for the economy. It creates the right conditions for credit expansion, private investment, and a more vibrant capital market, provided fiscal discipline is maintained,” Yusuf said.

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