Nigeria may be on the verge of lower lending rates as the Central Bank of Nigeria (CBN) acknowledges easing inflationary pressures, a shift that could unlock cheaper credit and stimulate fresh investment into the economy.
The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, speaking at the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos on Saturday, reaffirmed the Bank’s commitment to macroeconomic stability, strengthening the banking sector, and positioning Nigeria as a leading investment destination.
He noted that while inflation remains elevated, recent signs of moderation may pave the way for lower interest rates once stability is consolidated. “There is a substantial potential for interest rates to decrease in the future as inflation continues to decline and as markets become more efficient in allocating capital,” he said.
Cardoso acknowledged that high borrowing costs have strained businesses but stressed that restoring confidence and reinforcing the financial system’s resilience remain top priorities. He also highlighted the ongoing bank recapitalisation exercise as vital for building stronger institutions capable of withstanding shocks and driving growth.
According to him, technology-driven solutions, deeper financial inclusion, and expanded fintech access will play a key role in tackling poverty and bridging financing gaps. He further pointed to improved coordination with fiscal authorities as a positive shift, noting closer collaboration with the Ministries of Finance, Trade and Industry, and the Budget Office.
Cardoso also underscored Nigeria’s strategic position in West Africa, stressing the importance of maintaining domestic stability amid global geopolitical changes.
Eurocham President Yann Gilbert, in his remarks, commended the forum as a platform for constructive engagement between European businesses and Nigerian policymakers, while reaffirming members’ commitment to long-term partnerships in Nigeria.
The CBN raised its benchmark rate six times in 2024, from 18.75% to a record 27.50%, in its most aggressive tightening cycle in history. So far in 2025, however, the Bank has held the rate steady at 27.50% across its February, May, and July meetings.
Still, high interest rates remain the top constraint for Nigerian businesses, according to the June 2025 Business Expectations Survey, which ranked them above insecurity and poor electricity supply. The Lagos Chamber of Commerce and Industry also warned that maintaining rates at 27.5% continues to weigh heavily on businesses.
The next Monetary Policy Committee meeting, scheduled for September 22–23, 2025, is expected to provide clearer signals on whether the CBN will maintain its pause or begin easing policy as inflation trends downward.
