Abuja – The House of Representatives Committee on National Planning and Economic Development has warned the Central Bank of Nigeria (CBN) of the potential negative impact of sustained high interest rates on key sectors of the economy. The caution comes ahead of the apex bank’s 300th Monetary Policy Committee (MPC) meeting scheduled for next week.
During an engagement with the Statistician-General of the Federation and Chief Executive Officer of the National Bureau of Statistics (NBS) in Abuja, the committee’s chairman, Hon. Gboyega Nasiru, said the warning became necessary in light of the tightening monetary policy environment.
Nasiru acknowledged the gains recorded under the current administration’s market-driven reforms, stating that the economy has shown signs of stability and recovery. He noted that investor confidence is gradually returning, with the Nigerian capital market recording an almost 100 per cent increase over the last two years.
“The CBN has also seen its external reserves rise to the highest level in over three years, and recently declared a profit of N38.8 billion—a major turnaround from the N1.15 trillion loss in 2023,” Nasiru observed.
However, he expressed concern over the negative ripple effects of high interest rates on manufacturing, agriculture, and Small and Medium Enterprises (SMEs)—sectors he described as crucial for employment generation and economic inclusion.
“The Monetary Policy Rate (MPR) has been increased 10 times since January 2023, reaching 27.5 per cent from 16.5 per cent. While this aggressive tightening is intended to tame inflation, its effectiveness has been limited by structural constraints and supply chain inefficiencies,” he said.
Nasiru urged the CBN to consider a more balanced policy approach that supports growth and job creation, stressing that an overly restrictive stance could stifle real sector development.
In his contribution, the Statistician-General, Prince Adeyemi Adeniran, shared insights from the NBS’s latest data covering the second quarter of 2024. He said the national unemployment rate declined to 4.3 per cent from 5.3 per cent in the previous quarter.
Adeniran noted, however, that disparities persist. “Unemployment remains higher among females at 5.1 per cent compared to 3.4 per cent for males. It is also more prevalent in urban areas (5.2 per cent) than rural areas (2.8 per cent).”
He added that youth unemployment stood at 6.5 per cent, with 12.5 per cent of young people classified as Not in Employment, Education or Training (NEET). The NEET rate was notably higher among young females (14.3 per cent) than males (10.9 per cent).
Adeniran also revealed that reports for Q3 and Q4 2024 are currently being finalised and will be made public in the coming weeks.
As monetary authorities prepare for the landmark MPC meeting, the House committee’s caution underscores growing concerns about balancing inflation control with the imperative for inclusive and sustained economic growth.
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