The Centre for the Promotion of Private Enterprise (CPPE) has called on the Central Bank of Nigeria (CBN) to adopt more flexible monetary policies that will stimulate credit flow into the economy, especially for small and medium enterprises (SMEs) and critical sectors.
In a policy advisory issued on Sunday, the Chief Executive Officer of CPPE, Dr. Muda Yusuf, urged the apex bank to recalibrate its monetary stance by lowering the Cash Reserve Ratio (CRR) and the Monetary Policy Rate (MPR) in line with recent signs of moderating inflation.
In the statement, Yusuf urged the CBN to “Calibrate CRR and MPR downward as inflation moderates to create a more enabling credit environment. Complement monetary tightening with supply-side measures to address structural inflation drivers.”
He stressed that the CBN’s current tight monetary posture, though aimed at curbing inflation, has inadvertently limited access to affordable credit for businesses and households.
CPPE calls for credit guarantee schemes for SMEs
The CPPE boss further emphasized the need for innovative financing models to bridge the credit gap for SMEs, which remain the backbone of Nigeria’s economy.
He called for the creation of credit guarantee schemes and concessionary financing programs tailored to small businesses and strategic sectors such as agriculture, manufacturing, and renewable energy.
“Develop credit guarantee schemes and concessionary financing programs for SMEs and critical sectors of the economy.
“Promote development finance instruments and deepen the domestic bond market to mobilize resources for infrastructure,” CPPE said.
Group commends CBN governor
The group further commended CBN Governor Yemi Cardoso for bringing about “a significant transformation of Nigeria’s financial system, with gains in transparency, credibility, and stability.”
CPPE stated that under Cardoso’s leadership, the CBN has undertaken comprehensive reforms aimed at restoring confidence, strengthening governance, and repositioning the financial system to support inclusive and sustainable economic growth.
Speaking of the forex market, CPPE noted that one of the most significant reforms under Cardoso has been the liberalization and unification of the foreign exchange (FX) market.
“The elimination of multiple FX windows reduced opportunities for arbitrage and corruption,” CPPE stated.
What you should know
The CBN announced the retention of the MPR at 27.5%, following the conclusion of its 301st Monetary Policy Committee (MPC) in July.
All 12 members of the MPC voted unanimously to maintain the MPR at 27.5%.
Analysts predict that the MPC may cut the MPR by 25 to 50 basis points at its 302nd meeting this week, citing easing inflation, naira stability, and global monetary trends as key factors.
