LCCI Applauds CBN's Interest Rate Reduction, Calls for Job Protection Measures
The Lagos Chamber of Commerce and Industry (LCCI) has expressed strong support for the Central Bank of Nigeria's (CBN) recent decision to lower the Monetary Policy Rate (MPR) by 50 basis points, bringing it down to 26.50 percent. This significant monetary policy adjustment marks a pivotal shift in Nigeria's economic strategy, moving from a period of aggressive tightening toward a more stabilised phase driven by disinflation and improving macroeconomic indicators.
Positive Signal Amid Declining Inflation Trends
In an official statement released by its Director General, Chinyere Almona, the LCCI highlighted that inflation has now declined for eleven consecutive months, reaching 15.1 percent as of January 2026. This sustained downward trend reflects the effectiveness of recent economic reforms and stricter policy discipline implemented across various sectors. The chamber described the rate cut as a cautious yet encouraging signal to the Organised Private Sector (OPS), establishing a clear pathway toward gradually reducing the cost of capital for businesses nationwide.
While the retention of other monetary parameters indicates that liquidity conditions remain restrictive, the LCCI emphasized that this policy shift sends a critical confidence message to both domestic and foreign investors. It suggests Nigeria is transitioning from a reform-driven adjustment period into a stabilisation-led expansion phase, which could attract increased investment in key areas such as manufacturing, agro-processing, pharmaceutical production, and export-oriented industries.
Structural Challenges Could Limit Business Impact
Despite welcoming the rate reduction, the chamber issued important cautions regarding potential limitations. High reserve requirements for banks, slow credit transmission mechanisms, and persistent structural constraints within the economy could significantly restrict the impact of monetary easing on real-sector growth. Businesses continue to require meaningful reductions in financing costs to restore production levels, expand capacity, and most importantly, protect existing jobs across various industries.
The LCCI specifically called for improved policy predictability, stronger real return expectations, and enhanced support for medium-term investment planning. It urged the government to address critical bottlenecks in the business environment while attracting foreign direct investment into strategic sectors including renewable energy, transport logistics, agro-processing, and oil and gas. The chamber also emphasized the necessity of expanding local refining capacity and strengthening industrial systems beyond political cycles to ensure sustainable development.
Comprehensive Reforms Needed for Sustained Growth
Looking beyond monetary policy, the LCCI advocated for a calibrated but sustained easing cycle that remains tied to inflation trends and real-sector performance. This should be accompanied by accelerated reforms in several key areas:
- Power supply infrastructure and reliability
- Transportation networks and logistics systems
- Agricultural productivity and value chain development
- Regulatory processes and bureaucratic efficiency
The chamber expressed optimism about the newly launched digital single window platform by the Nigerian Customs Service, which promises to simplify port transactions and reduce delays. Additionally, it highlighted the potential for increased private-sector credit allocation toward productive activities and greater investment in critical infrastructure, particularly with higher allocations from the Federation Account Allocation Committee (FAAC) following recent executive orders on direct revenue remittance.
Projected Economic Growth with Coordinated Policies
The LCCI projected that with stronger coordination between monetary and fiscal authorities, Nigeria could achieve short-term GDP growth exceeding five percent. This optimistic outlook depends on several factors including sustained transparency in the foreign exchange market to strengthen investor confidence, continued disinflationary trends, and effective implementation of complementary economic policies.
While the CBN maintained other monetary parameters unchanged—including the asymmetric corridor at +50/-450 basis points around the MPR, Cash Reserve Ratio at 45 percent for Deposit Money Banks and 16 percent for Merchant Banks, and Liquidity Ratio at 30 percent—the LCCI views this cautious approach as signaling that while easing has begun, policymakers remain vigilant about maintaining economic stability. The chamber's comprehensive analysis underscores the interconnected nature of monetary policy, business environment reforms, and industrial development in driving Nigeria's economic recovery and growth trajectory.
