The House of Representatives Committee on National Planning and Economic Development has warned the Central Bank of Nigeria (CBN) against the adverse effects of maintaining high interest rates in its bid to curb inflation.
Chairman of the committee, Rep. Gboyega Nasiru (APC-Ogun), issued the caution on Wednesday in Abuja during a meeting with the Statistician-General of the Federation and CEO of the National Bureau of Statistics (NBS), Mr. Adeyemi Adeniran.
Nasiru said the caution was timely as the CBN prepares for its 300th Monetary Policy Committee (MPC) meeting scheduled for early next week.
He noted that while the President Bola Ahmed Tinubu administration had taken bold, market-driven reforms that are beginning to yield results, the persistently high interest rates were stifling key sectors of the economy.
“There appears to be a general consensus that the current administration has pursued critical reforms that are stabilising the economy and restoring investor confidence,” Nasiru said.
He noted that the capital market had gained nearly 100 per cent over the past two years, and the CBN had recorded its highest external reserves in over three years. The apex bank, he added, also posted a profit of N38.8 billion—marking a turnaround from the N1.15 trillion loss in 2023.
Despite these gains, Nasiru expressed concern over the toll high interest rates were taking on the manufacturing, agriculture and Small and Medium Enterprises (SME) sectors, which are critical for job creation.
“The Monetary Policy Rate (MPR) has been raised 10 times since January 2023, now standing at 27.5 per cent—up from 16.5 per cent in 2023—in an effort to tackle demand-pull inflation.
“However, the policy’s effectiveness appears constrained by structural bottlenecks and supply chain inefficiencies.
“We therefore urge the monetary authorities to consider a more accommodative stance that balances inflation control with the need to support growth and employment,” he said.
In his remarks, Adeniran said the latest NBS data showed that the unemployment rate declined to 4.3 per cent in Q2 2024, down from 5.3 per cent in the previous quarter.
He noted, however, that unemployment remained more prevalent among females (5.1 per cent) than males (3.4 per cent), and higher in urban areas (5.2 per cent) compared to rural areas (2.8 per cent).
Adeniran added that youth unemployment stood at 6.5 per cent, with 12.5 per cent of young people not in employment, education or training (NEET). The NEET rate was higher among young females (14.3 per cent) than their male counterparts (10.9 per cent).
He said the Q3 and Q4 2024 labour force reports were currently being finalised and would be released soon.
