NECA warns against overreliance on monetary tools
CHIGOZIE AMADI
The Nigeria Employers’ Consultative Association has expressed concern about the Central Bank of Nigeria’s continued reliance on monetary policy tightening.
NECA stated this in a statement on Wednesday by its Director-General, Mr Adewale Oyerinde, following the Monetary Policy Committee’s decision to retain the Monetary Policy Rate at 27.50 per cent.
According to Oyerinde, while the latest data from the National Bureau of Statistics indicates a marginal decline in headline inflation from 24.23 per cent in March 2025 to 23.71 per cent in April 2025 and a reduction in food inflation to 21.36 per cent, it asserts that these movements, though positive, have yet to translate into real relief for households and the productive sector.
Oyerinde emphasised that the decision to retain the MPR and other policy instruments highlights the CBN’s intention to control inflation.
He, however, highlighted that monetary tightening, in isolation from other critical considerations, cannot deliver the comprehensive economic stability the country urgently needs.
“Businesses continue to suffer under the weight of exorbitant borrowing costs, even when other economies are progressively reducing the cost of borrowing to stimulate growth, high exchange rates, weak consumer demand, and a strangulating regulatory environment. There is an urgent need to address the contradictions in the economy that continue to manifest in the huge profits in the financial sector while the real sector continues to grapple under the weight of low margins,” Oyerinde said.
The DG noted that while headline inflation figures offer a glimmer of hope, they mask the more deep-rooted structural challenges facing the Nigerian economy.
“The marginal drop in inflation must not obscure the deeper structural constraints, particularly in food production and energy supply. The cost of doing business remains alarmingly high, and without urgent reforms, the productive sector will continue to struggle,” Oyerinde added.
The NECA boss reiterated the urgent need for a coordinated policy response that goes beyond rate adjustments.
He mentioned that strategic fiscal interventions, such as increased investments in transport infrastructure, power supply, and agricultural value chains, would reduce production costs and ease inflationary pressures from the supply side.
He said, “The government must act decisively to secure farming communities, improve access to quality agricultural inputs and mechanisation, and address logistics bottlenecks. These steps are essential to improving supply-side resilience and unlocking productivity.”
Oyerinde pointed out that with over 80 per cent of Nigeria’s labour force engaged in the informal and agrarian sectors, neglecting the structural side of inflation only exacerbates existing inequalities and stunts inclusive growth.
He urged the monetary and fiscal authorities to collaborate more effectively, promoting policies that reflect the realities of businesses, workers, and households.
“A holistic and inclusive approach is necessary, one that stimulates investment, fosters job creation, and ensures that the fight against inflation does not inadvertently become a brake on development,” Oyerinde concluded.
