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The Centre for the Promotion of Private Enterprise (CPPE) has called on the Central Bank of Nigeria (CBN) to adopt a more balanced monetary policy stance, warning that restrictive measures are worsening access to credit for small and medium enterprises (SMEs) and other critical sectors of the economy.
The appeal was made by CPPE’s Chief Executive Officer, Dr. Muda Yusuf, in a review of Governor Yemi Cardoso’s two years at the helm of the apex bank. While commending the CBN’s strides in stabilising the financial system, Yusuf cautioned that tight monetary policies have significantly raised borrowing costs for businesses.
“The Monetary Policy Rate at 27.5 per cent and the Cash Reserve Ratio at 50 per cent have considerably pushed up the cost of funds. Elevated lending rates have suppressed private sector borrowing, particularly in manufacturing, agriculture, SMEs, real estate, and other key sectors,” Yusuf stated.
He acknowledged that the Cardoso-led CBN has strengthened governance, improved transparency, liberalised the foreign exchange market, and introduced recapitalisation measures to bolster banking sector resilience. These reforms, he noted, have also helped ease inflationary pressures through monetary tightening and liquidity management.
However, Yusuf stressed that structural financing gaps persist, with SMEs and infrastructure-related sectors still facing limited access to affordable long-term funding. “A fully market-based approach, while improving efficiency, has not addressed structural financing gaps,” he said, calling for targeted interventions to bridge these deficits.
The CPPE boss recommended a gradual easing of monetary tightening as inflation moderates, alongside the development of credit guarantee schemes, concessionary financing programmes, and development finance instruments to support SMEs, infrastructure, and agriculture.
He also emphasised the need to institutionalise governance reforms, safeguard the CBN’s autonomy through stronger legal frameworks, and enhance policy communication to build investor confidence.
“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,” Yusuf concluded.
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