The Central Bank of Nigeria (CBN) has been warned not to rush into relaxing the Monetary Policy Rate (MPR) as the inflation figures currently being reported are still “outliers” and do not provide a stable basis for such a policy shift.
The CEO of SPM Professionals, Dr. Paul Alaje, made this known while speaking on Politics Today on Channels Television.
The economic and financial expert commended the apex bank for some of its recent reforms, but cautioned that premature adjustments could derail progress.
“I think the central bank is making some very good policy. This time, I only hope that some of those policies will be sustained. For instance, relaxing MPR shouldn’t be now.
“We may need to wait a bit more, especially because some of the inflation numbers we are seeing are outliers. I didn’t say they are lies. I’m saying they are outliers. Because they are two different things. So, we need to wait to have a full year cycle, which is what I said the first time, before we can consider easing the rate or not,” Alaje said.
Behavior of politicians will determine next four years’ economic course
Alaje also highlighted the dangers posed by political activities in the lead-up to the 2027 general elections, warning that reckless handling of foreign exchange during campaigns could erode the fragile economic stability Nigeria is beginning to experience.
“Even the danger starts more with the pre-election year. The behavior of politicians will determine whether we are going to have another great four years or another horrible four years. And this is what I want President Tinubu to do. Warn politicians, all inclusive, from federal to local government, no exchange of foreign currency, to delegate or for whatever,” he said.
According to him, any political abuse of foreign exchange could immediately trigger volatility in the naira and erase recent progress in stabilizing the economy.
“The little sign of positivity that we are seeing will evaporate overnight. Honestly, because when anything happens to exchange rates, don’t believe me. Believe the Bureau of Statistics.
“80% of all imports, I mean, final goods, 80% of all final goods are imported to Nigeria. When you make exchange rates scarce because we are using them for elections, I tell you, people might tell you that things will be better soon. Look at how long it has taken us.
“From 2015, we are beginning to see some little sign of a difference. I hope, because we still have a long way to go. Before this impacts people, which is what many people might be asking me on air, that when do you think, at least if it continues like this, you might start seeing some changes in three to four years, provided that 2027 elections, starting with next year, there are not too much, or there is no distribution of foreign currency.
“But if we do, and you start seeing it in our stadium, you are seeing people exchanging money, I’m sorry. The economy may go back to where it is that we are praying,” he cautioned.
What you should know
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, on Sunday, projected a future decline in interest rates, citing easing inflation and improved capital allocation efficiency as key drivers.
Speaking at the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos, Cardoso emphasized that the current high lending rates, ranging between 32% and 36% on commercial loans, could see downward pressure as macroeconomic conditions stabilize.
Also, the CBN announced the retention of the MPR at 27.5%, following the conclusion of its 301st Monetary Policy Committee (MPC) meeting held on Tuesday, July 22, 2025.
The National Bureau of Statistics (NBS) report last month showed that Nigeria’s headline inflation rate slowed slightly to 21.88% in July 2025, marking a modest retreat from the previous month’s figure of 22.22%.
The data shows that, on a year-on-year basis, the headline inflation rate was 11.52% lower than the rate recorded in July 2024, which was at 33.40%.
