CPPE warns CBN tightening worsens Nigeria's N50tn development finance gap
CPPE warns that the Central Bank of Nigeria's prolonged monetary tightening has worsened the country's development finance gap, now estimated at over N50 trillion. The think-tank cites the Monetary Policy Rate at 26.5 percent and the Cash Reserve Requirement at 45 percent, which push commercial lending rates above the returns many productive investments can generate.
This gap hampers industrialisation, agricultural transformation, MSME growth, supply-chain financing and export-oriented enterprises. While CPPE acknowledges the CBN's success in stabilising the exchange rate and moderating inflation, it cautions that treating price stability and development finance as competing goals could undermine investment, productivity and employment.
CPPE urges the CBN and the Federal Government to significantly recapitalise the Bank of Industry and the Bank of Agriculture as the main channels for long-term productive-sector financing. For businesses and policymakers, the key question is: Will recapitalising BoI and BoA actually lower borrowing costs for manufacturers and farmers, or will deeper structural constraints keep financing expensive?