The Central Bank of Nigeria's decision to cut its Monetary Policy Rate from 26.5 percent to 23 percent has raised hopes of improved access to finance for businesses. The Lagos Chamber of Commerce and Industry and the Centre for the Promotion of Private Enterprise have welcomed the 350-basis-point reduction. They described it as an opportunity to ease financing pressures, stimulate investment, and strengthen economic activity. However, they stressed that lower policy rates alone would not resolve the financing and operational challenges confronting Nigerian businesses.
The Monetary Policy Committee announced the rate cut at its 307th meeting on September 22, 2026. The Lagos Chamber of Commerce and Industry, in a statement signed by its Director-General, Dr. Chinyere Almona, said the rate reduction was a welcome development, particularly for micro, small, and medium-sized enterprises severely constrained by the high cost of credit. A lower policy rate could reduce the cost of funds in the financial system, improve credit conditions, and support private-sector investment.
The LCCI noted that businesses continued to operate under significant cost pressures arising from high energy costs, elevated logistics and transportation expenses, exchange-rate risks, rising input costs, and infrastructure deficiencies. Insecurity in parts of the country and uncertainties in the evolving political and policy environment could influence business confidence and lenders' risk assessments. These factors affect financial institutions' willingness to extend credit, especially to SMEs.
The LCCI urged the Central Bank and financial institutions to make credit transmission a priority by ensuring that the benefits of monetary easing progressively reflect in more affordable and accessible financing for productive businesses. The chamber recommended closer monitoring of commercial banks' lending rates and credit allocation to productive sectors. It also advocated stronger credit guarantees and partial-risk guarantees to encourage lending to viable SMEs.
The Centre for the Promotion of Private Enterprise, in its policy brief signed by its Chief Executive Officer, Dr. Muda Yusuf, described the rate cut as a significant shift from the prolonged restrictive monetary policy regime. The organisation said the adjustment represented a recalibration of monetary policy towards supporting growth, investment, and economic recovery while preserving price and financial-system stability.
The CPPE noted that the review of the asymmetric corridor around the Monetary Policy Rate, from +50/-450 basis points to +50/-300 basis points, further reinforced the adjustment of the monetary policy framework. The organisation said the decision was timely amid improving inflation dynamics and the growing costs of a restrictive monetary environment. It observed that the previous Monetary Policy Rate of 26.5 percent had become misaligned with inflation of about 15.4 percent and prevailing money-market rates.
The CPPE and LCCI agree that commercial lending rates on both new and existing facilities should progressively adjust downwards to reflect the new monetary policy environment. Without meaningful transmission to borrowers, the impact of the policy adjustment on investment and economic growth would be limited. The organisations also identified possible fiscal benefits from sustained moderation in interest rates, noting that the high-rate environment had contributed to the escalation of the Federal Government's domestic debt-service burden.
Key points
- The Central Bank of Nigeria cuts its Monetary Policy Rate from 26.5% to 23%.
- Business groups welcome the move but demand effective transmission to borrowers.
- The reduction may have limited impact on actual credit access unless underlying risks confronting enterprises are addressed.
