The Centre for the Promotion of Private Enterprise (CPPE) said the International Monetary Fund is mistaken in urging Nigeria to raise interest rates further, arguing that additional monetary tightening risks weakening growth and private investment rather than improving conditions for households.
CPPE made its position public in a statement released on Sunday by its chief executive officer, Muda Yusuf. The group was responding to the IMF’s recent Article IV Consultation Report on Nigeria, which—while highlighting progress—offered a positive assessment of reforms under President Bola Ahmed Tinubu’s administration, particularly moves aimed at restoring macroeconomic stability.
CPPE said the IMF’s acknowledgment of improved stability is consistent with views long held by Nigeria’s private sector. However, it argued that stability is only one part of the reform agenda, adding that the real benchmark for policy success should be whether reforms translate into better living standards for ordinary Nigerians.
The CPPE warned that aggressive tightening by monetary authorities, coupled with high borrowing costs and a heavy reliance on cash transfers, could reduce the inclusiveness of economic growth. It also criticised the IMF’s continued backing for monetary tightening, saying persistently elevated interest rates are making lending unaffordable for firms and discouraging investments that would expand production.
“The cost of credit in Nigeria has reached levels that are becoming increasingly prohibitive for productive investment. Lending rates remain among the highest in the world, making it difficult for businesses to expand, invest or create jobs,” CPPE said.
The group added that while exchange-rate steadiness, reserve building and fiscal consolidation matter, they are not sufficient indicators of reform effectiveness. “Exchange rate stability, reserve accumulation and fiscal consolidation are important, but the true test of reform is whether they translate into lower food prices, better jobs, improved incomes and enhanced living standards,” it stated.
On social protection, CPPE questioned the emphasis on conditional cash transfers. It argued that directing government funding toward initiatives with stronger long-term economic returns—such as agriculture, transportation, healthcare, education and infrastructure—would be more effective in reducing poverty over time.
“The most effective poverty reduction programme is one that reduces the cost of living and expands economic opportunities,” CPPE said.
In the area of development finance, the organisation maintained that targeted financing remains critical for sectors including agriculture, manufacturing, housing and infrastructure. CPPE argued that market-based funding alone cannot close Nigeria’s structural financing gaps.
“Development finance is not merely a policy choice; it is an economic necessity,” the group said, adding that agriculture and infrastructure projects often require long-term funding that commercial lenders are frequently unwilling or unable to provide.
CPPE also criticised the IMF report for giving limited attention to how state governments contribute to reform and poverty reduction. It said that as federation allocations have increased and boosted sub-national revenues, state authorities now have a key role in areas such as food production, healthcare, education, rural infrastructure and security.
“Economic transformation in a federation cannot be driven from the centre alone,” CPPE concluded.
