The House of Representatives Committee on National Planning and Economic Development has cautioned the Central Bank of Nigeria (CBN) against the unintended consequences of maintaining high interest rates to check inflation.
The committee’s chairman, Hon. Gboyega Nasiru (APC, Ogun), threw caution to the wind yesterday at a meeting with Adeyemi Adeniran, the Statistician-General of the Federation and Chief Executive Officer of the National Bureau of Statistics (NBS).
The lawmaker said the caution became necessary as the CBN prepares for its 300th Monetary Policy Committee (MPC) meeting scheduled for early next week.
Nasiru said there is a consensus that the current administration has taken bold steps and pursued market-driven reforms, which are beginning to yield positive outcomes.
He admitted that the policy direction had delivered notable results, with the economy stabilising and investor confidence gradually returning.
Nasiru noted that Nigeria’s capital market had surged by about 100 per cent in the last two years, while the CBN recorded its highest external reserves in over three years.
He further said CBN recently posted a profit of N38.8 billion—a significant recovery from the N1.15 trillion loss recorded in 2023.
Nasiru, however, expressed concern that the sustained high interest rate has adversely affected the manufacturing, agriculture, and Small and Medium Enterprises (SME) sectors, which are critical to employment generation.
“The Monetary Policy Rate (MPR) has been raised 10 times since January 2023, currently standing at 27.5 per cent—up from 16.5 per cent in 2023—to tackle demand-pull inflation. However, structural bottlenecks and supply chain inefficiencies have undermined the effectiveness of this policy.
“It is therefore our view that, given the current economic landscape, the monetary authorities—at their meeting next week—should consider a more accommodative stance that supports both growth and employment,” he said.
In his remarks, Adeniran noted that the latest Bureau data, covering the second quarter of 2024, reported an unemployment rate of 4.3 per cent, down from 5.3 per cent in the previous quarter.
The Statistician-General said unemployment was more prevalent among females (5.1 per cent) than males (3.4 per cent) and higher in urban areas (5.2 per cent) than in rural areas (2.8 per cent).
He also stated that young people face a relatively higher unemployment rate of 6.5 per cent, while 12.5 per cent of youth are not in employment, education, or training (NEET), which was higher among young females (14.3 per cent) compared to young males (10.9 per cent).
Adeniran further disclosed that the third and fourth quarters of 2024 reports were being concluded and will soon be released to the public.