The Central Bank of Nigeria (CBN) has been urged to adjust its market-driven monetary policy to better support the real sector of Nigeria's economy. Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), made this appeal during a Networking and Breakfast Meeting hosted by the Association of Corporate Treasurers of Nigeria (ACTN) in Lagos.

He expressed concern that the current monetary policy of the central bank favors speculative investors who are benefiting from high returns on fixed income assets, such as Treasury Bills, while neglecting those in the real sector. Dr. Yusuf emphasized that businesses in the real sector, particularly manufacturers and farmers, are struggling to survive with interest rates exceeding 32 percent, compounded by significant currency depreciation since the shift to orthodox monetary policy in 2023.

“The existing policy framework appears to disadvantage producers, which is counterproductive. Some investments in bonds and treasury bills enjoy tax exemptions, while tax authorities are actively pursuing manufacturers,” he remarked.

Yusuf pointed out that the transition from unorthodox to orthodox monetary policy has resulted in unexpected shocks for businesses, advocating for a “fine-tuning and recalibration of the reform process.”

“Currently, lending rates have surged to over 34 percent under the market-driven monetary policy. Regardless of whether one is involved in manufacturing, agriculture, or real estate, borrowing under the prevailing interest conditions makes it challenging to achieve a viable return on investment.

“Both a manufacturer sourcing raw materials and a wealthy individual importing luxury vehicles are subjected to the same foreign exchange (FX) rates. It raises the question of whether this approach is truly effective.”

Yusuf noted that the unforeseen outcome of reverting to orthodox practices was the departure of multinational manufacturing companies and numerous large corporations that are exposed to significant foreign currency risks.