The Central Bank of Nigeria (CBN) has been called upon to tailor its market-oriented monetary policy towards the protection of the real sector of Nigeria’s economy.  

Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, made the call at a Networking and Breakfast Meeting of the Association of Corporate Treasurers of Nigeria’s (ACTN) in Lagos.

He said that the current monetary policy stance of the apex bank is promoting speculative investors who are reaping good margins from investing in fixed income assets, Treasury Bills, etc., at the expense of investors in the real sector.  

According to him, it is difficult for any business in the real sector, especially manufacturers and farmers, to thrive with an interest rate of over 32 percent amid massive currency depreciation since the return to orthodox monetary policy in 2023.

“The current policy being adopted by CBN seems to penalise people who are in production, which is counterproductive. Some investments in bonds and treasury bills are tax free while tax people are busy chasing manufacturers all over the places,” he stated.

Yusuf noted that the transition from unorthodox to orthodox monetary policy has caused shocks beyond what most business analysts have imagined, and called for “fine tuning and recalibrating the reform process”.

“Today the lending rate has gone up to over 34 percent under the market driven monetary policy. No matter whether you are manufacturing or you are in agriculture or real estate etc. you cannot borrow under the current interest regime and make any sound return on investment.  

“Whether you are a manufacturer importing raw materials or a wealthy individual importing a limousine, both of you will be buying foreign exchange (FX) at the same rate. It is debatable if this model is the right thing?”

Yusuf said that the unintended consequence of the return to orthodoxy included exit of the multinational manufacturing concerns and many big corporate entities that are entangled in huge foreign currency risk.