IMF wrong on Nigeria’s interest rates, cash transfer — CPPE

The Centre for the Promotion of Private Enterprise has said the International Monetary Fund is wrong on calling for further interest hikes in Nigeria.

CPPE disclosed this in a statement on Sunday by its chief executive officer, Muda Yusuf. 

Recall that the IMF’s recent Article IV Consultation Report on Nigeria gave a positive assessment of President Bola Ahmed Tinubu government’s economic reforms. 

Reacting, the economic policy advocacy group said the Fund’s recognition of progress in restoring macroeconomic stability aligns with the views long held by the private sector.

CPPE, however, said that macroeconomic stability alone is not enough, arguing that the real measure of economic reforms lies in their ability to improve living conditions for ordinary Nigerians.

The economic think tank group warned that excessive monetary tightening, high interest rates and an overreliance on cash transfers could undermine inclusive growth.

CPPE also expressed concern over the IMF’s continued support for monetary tightening, warning that persistently high interest rates are making credit unaffordable for businesses and discouraging productive investment.

“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,” it said.

“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 continued emphasis on conditional cash transfers, arguing that government resources would yield greater long-term benefits if invested in agriculture, transportation, healthcare, education and infrastructure.

“The most effective poverty reduction programme is one that reduces the cost of living and expands economic opportunities,” it stated.

On Nigeria’s development finance, CPPE maintained that targeted intervention funding remains essential for sectors such as agriculture, manufacturing, housing and infrastructure, insisting that market-based financing alone cannot address Nigeria’s structural funding gaps.

“Development finance is not merely a policy choice; it is an economic necessity,” the group noted, adding that agriculture and infrastructure projects require long-term financing that commercial lenders are often unwilling or unable to provide.

CPPE also faulted the IMF report for paying insufficient attention to the role of state governments in driving economic reforms and reducing poverty.

According to CPPE, with increased federation allocations boosting state revenues, sub-national governments now play a crucial 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,” the organisation said.

IMF wrong on Nigeria’s interest rates, cash transfer — CPPE