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BREAKING: NACCIMA faults CBN’s MPR hike to 24.75%, predicts negative impacts on private sector 



The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has expressed concern over CBN’s MPR hike to 24.75%, warning of negative impacts on Nigeria’s private sector. 

In a statement on Tuesday, the president of the association, Dele Oye, said the increase in MPR to 24.75% and Cash Reserve Ratio (CRR) to 45% will have severe repercussions on private businesses in the country.  

According to Oye, the association had earlier written to the CBN’s governor on March 13, 2024, when the apex bank first raised the MPR to 22.75%.  

Reiterating its position, the president said that the private sector has been sidelined from the decision-making process of the apex bank.  

He also mentioned that this policy could inadvertently cause inflation, with businesses likely to increase the prices of goods and services to offset the higher borrowing costs. 

The president highlighted four key issues the association has with the apex bank’s rate hike in a formal statement, saying:  

Increase in the Cost of Borrowing: Existing loans will incur higher interest rates, raising the cost of capital for businesses. This scenario discourages entrepreneurial activities and expansion plans, which are vital for economic growth and job creation.

Restricted Credit Availability: With the increase in the CRR, banks’ ability to lend is further curtailed. This exacerbates the challenges faced by the private sector, which is already grappling with limited access to finance.

Pass-Through Effects on Inflation: As businesses incur higher interest costs, they are left with no option but to pass these costs on to consumers through increased prices for goods and services, which can contribute to inflation rather than curb it.

Stifling Economic Growth: Tightened monetary conditions may lead to a reduction in investment and consumption, which are essential drivers of economic growth. This could potentially stifle the economic recovery and dampen the prospects for prosperity.

Meanwhile, the association advised the CBN governor to aim for a refined and focused strategy that directly tackles liquidity challenges in the public sector, while minimizing the strain on the private sector. 

The president emphasized the need for clear policy directions communicated quarterly and a strong strategy to engage stakeholders, ensuring the private sector’s input in policy making. 

Earlier in March, NACCIMA wrote a letter addressing the CBN governor, Yemi Cardoso, on the increase in MPR and CRR, and its effects on private enterprises in the country. 

At that time, the CBN had just raised the MPR to 22.75% from 18.75% and CRR to 45%, while holding the liquidity ratio steady at 30%.