ActionAid Nigeria has responded to the Central Bank of Nigeria’s (CBN) decision to raise the Monetary Policy Rate (MPR) to 26.25%, announced by Governor Yemi Cardoso during the 295th Monetary Policy Committee (MPC) meeting.
In a statement, ActionAid Nigeria Country Director, Andrew Mamedu said this marks the third consecutive increase aimed at curbing inflation, currently at 33.69%.
Andrew Mamedu, Country Director of ActionAid Nigeria, acknowledged the proactive approach to achieving economic stability but highlighted the broader implications of the increased MPR. “While inflation is rising, the month-on-month rate increase is reducing,” Mamedu noted. “However, higher MPR will lead to increased borrowing costs for businesses and individuals, particularly affecting Small and Medium-sized Enterprises (SMEs), which are crucial for economic growth and job creation.”
Mamedu also expressed concern for vulnerable populations facing rising living costs and food prices, exacerbated by higher interest rates. “The double jeopardy of high inflation and high interest rates strains their limited financial resources, making it harder to secure loans for essential needs,” he added.
To mitigate these impacts, ActionAid Nigeria calls on the Federal and State Governments to enhance social protection programs, expand food assistance, provide targeted financial aid to low-income families, and bolster support for education, health, and housing sectors.
Mamedu urged the CBN to increase special credit facilities with lower interest rates for SMEs and collaborate with the National Orientation Agency (NOA) to educate the public on the rationale behind these economic policies. “This will foster understanding, manage expectations, and build trust,” he stated.
He emphasized the need for fiscal policies to complement the CBN’s efforts, including improving the ease of doing business, implementing progressive taxation, and ensuring effective budgeting.
ActionAid Nigeria remains committed to collaborating with the government, private sector, and civil society to address these challenges and promote an inclusive and resilient economy.
