The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has raised hopes for businesses and investors as he revealed that lending rates could fall in the coming months if the country’s inflationary pressures continue to ease.
Cardoso made this assurance during a fireside chat at the European Business Chamber (Eurocham Nigeria) C-Level Forum held in Lagos over the weekend.
His remarks come at a time when Nigerian businesses have been struggling under the weight of elevated interest rates, which currently stand at 27.5 percent, the highest on record.
In a statement released on Sunday, the CBN reiterated its commitment to macroeconomic stability, resilience in the banking sector, and positioning Nigeria as a competitive global investment hub.
Cardoso acknowledged the hardship caused by high lending rates but stressed that they were a necessary tool to bring inflation under control and stabilize the financial system.
“Headline inflation, though still high, has begun to slow down, creating the possibility of lower lending rates once price stability is further consolidated,” the CBN Governor said.
He further noted that a sustained decline in inflation and greater efficiency in capital allocation would create an enabling environment for stronger corporate lending and investment growth.
Cardoso highlighted the ongoing bank recapitalisation exercise, describing it as central to strengthening Nigeria’s financial system.
The introduction of new minimum capital requirements, he explained, will produce stronger and more resilient financial institutions capable of financing broader economic expansion while withstanding external shocks.
He added that technology-driven banking, digital platforms, and expanded financial inclusion remain top priorities for the apex bank.
According to him, fintech innovation will help bridge financing gaps, tackle poverty, and widen access to credit for small businesses and households.
Nigerian businesses have consistently ranked high interest rates as the most severe constraint on their operations.
The CBN’s June 2025 Business Expectations Survey, which sampled 1,900 firms, revealed that interest rates topped the list of business concerns at 75.6 points on the constraint index, ahead of insecurity (75.2) and inadequate power supply (74.3).
The Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, has also warned that maintaining the Monetary Policy Rate (MPR) at 27.5 percent poses a “depressing burden” on enterprises.
“We must restate that the interest rate at 27.5 percent remains a depressing burden on businesses. We therefore desire to see a reduction in the Monetary Policy Rate,” she emphasized.
Cardoso underscored the improved coordination between the CBN and fiscal authorities, particularly the Ministries of Finance, Trade, and the Budget Office, which he described as vital to sustaining reforms.
This closer alignment, he said, will ensure that Nigeria remains attractive to both domestic and international investors.
Speaking on Nigeria’s regional role, the CBN Governor emphasized that the nation’s size and location give it a strategic advantage within West Africa.
“Nigeria is a market that is both large and appealing in its own right, and it is also situated at the entrance to the broader continent and West Africa.
This underscores the importance of maintaining stability at home,” he stated.
The CBN implemented an aggressive tightening cycle in 2024, raising the MPR six times from 18.75 percent in January to 27.50 percent in December.
This unprecedented tightening aimed to curb runaway inflation and support the naira, which had been under severe pressure.
However, 2025 has so far marked a pause, with the CBN maintaining rates at 27.50 percent in its February, May, and July meetings.
Analysts now believe that the September 22–23 Monetary Policy Committee (MPC) meeting will be critical in determining whether the apex bank begins to ease policy in response to moderating inflation.
For many businesses, especially in the manufacturing and agricultural sectors, a reduction in lending rates would ease access to credit, lower production costs, and spur job creation.
Economists also argue that lower rates would encourage more private-sector investment, further stabilizing the economy and strengthening Nigeria’s recovery path.
Market watchers say all eyes are now on the upcoming MPC meeting, where investors, entrepreneurs, and financial institutions will be hoping for a policy shift that balances the fight against inflation with the urgent need to reduce borrowing costs.
As inflation shows signs of easing and stability returns to Nigeria’s financial system, the prospect of lower lending rates offers a ray of hope for businesses and households alike.
The CBN’s stance suggests that the era of ultra-high interest rates may soon give way to more accommodative monetary conditions, opening a new chapter for growth and investment in Africa’s largest economy.
