The Nigeria Employers’ Consultative Association (NECA) has raised serious concerns over the Central Bank of Nigeria’s (CBN) persistent reliance on monetary policy tightening as the primary tool to control inflation. This warning comes in the wake of the Monetary Policy Committee’s (MPC) decision to maintain the Monetary Policy Rate (MPR) at 27.50 percent, a move aimed at curbing inflation but one that NECA argues is insufficient on its own to stabilize the economy.
In a statement issued on Wednesday by NECA’s Director-General, Mr. Adewale Oyerinde, the association acknowledged the recent National Bureau of Statistics (NBS) data showing a slight decline in headline inflation from 24.23 percent in March 2025 to 23.71 percent in April 2025. Similarly, food inflation fell marginally to 21.36 percent. Despite these positive indicators, Oyerinde stressed that the impact on the everyday lives of households and the productivity of businesses remains negligible.
“While the marginal dip in inflation is encouraging, it has not yet translated into real economic relief. The high borrowing costs, elevated exchange rates, and a challenging regulatory environment continue to weigh heavily on businesses,” he said. Oyerinde criticized the overemphasis on monetary tightening, stating that it neglects the broader economic challenges that Nigeria faces.
Challenges Beyond Monetary Policy
NECA’s position highlights the limitations of using interest rate hikes and other monetary tools as standalone solutions. The organization points to the strain on Nigeria’s productive sector, which struggles under the burden of expensive loans while other global economies are easing borrowing costs to spur growth.
According to Oyerinde, the continued high costs of doing business—especially in agriculture and manufacturing—are due to deep-rooted structural issues such as unreliable power supply, poor transportation infrastructure, and bottlenecks in agricultural value chains. These factors increase production costs, pushing prices higher and contributing to inflation from the supply side.
He emphasized the urgent need for coordinated fiscal and monetary interventions. “The government must boost investments in critical infrastructure, including transport networks and energy provision, to ease operational costs for businesses. Improving access to quality agricultural inputs and mechanization is also vital to enhance food production and supply chain efficiency,” Oyerinde said.
Inflation and Labour Market Realities
NECA also cautioned that inflation control efforts should consider Nigeria’s labour market dynamics. With over 80 percent of the workforce engaged in informal and agrarian activities, policies that focus only on monetary adjustments risk deepening economic inequality and excluding a large segment of the population from growth benefits.
“A holistic approach is essential. Monetary policy should be complemented by strategic fiscal measures that stimulate investment, create jobs, and enhance productivity,” Oyerinde stressed. He urged stronger collaboration between the CBN and fiscal authorities to formulate policies that reflect the realities of Nigerian businesses, workers, and households.
Looking Ahead
The call by NECA for a more balanced and inclusive economic strategy comes at a critical time when inflationary pressures remain a major concern for Nigerians. The Central Bank’s recent Inflation Expectation Survey found that energy costs—led by rising fuel prices—are the biggest driver of inflation perception, followed closely by transportation expenses.
Experts agree that unless structural reforms address the root causes of inflation, the economy will continue to face volatility. NECA’s advocacy for a mix of monetary restraint and targeted fiscal investments offers a pathway to stabilizing prices and fostering sustainable economic growth.
In conclusion, NECA’s warning serves as a crucial reminder that monetary tools alone cannot resolve Nigeria’s complex economic challenges. The future of inflation control and economic stability lies in multi-dimensional policy responses that stimulate production, improve infrastructure, and support the country’s vast informal sector.