The Centre for the Promotion of Private Enterprise (CPPE) has urged the Central Bank of Nigeria (CBN) to adopt a more balanced approach to monetary policy, warning that small and medium-sized enterprises (SMEs) are being stifled by limited access to affordable credit.
Speaking in Abuja on Sunday, CPPE Director-General Dr Muda Yusuf reviewed Governor Yemi Cardoso’s two years in office, acknowledging progress in stabilising the financial system but highlighting the burden of restrictive policies on businesses.
“The policy rate of 27.5% and the reserve requirement ratio of 50% have significantly increased the cost of financing. High interest rates have hampered private sector borrowing, particularly in manufacturing, agriculture, SMEs, real estate and other sectors,” Mr Yusuf said.
He noted that despite reforms to strengthen governance, restore transparency, and rebuild confidence in the financial system, many structural gaps in financing remained unresolved.
“Small and medium-sized enterprises have limited access to affordable credit. Infrastructure, industrial, agricultural, construction, and real estate projects lack patient capital and affordable long-term financing mechanisms,” he added.
Mr Yusuf commended the CBN for liberalising the foreign exchange market, improving corporate governance, and implementing recapitalisation measures to boost the resilience of banks. He also acknowledged that tighter monetary policies had helped slow inflation.
However, he cautioned that “a fully market-based approach, while improving efficiency, has not addressed structural financing gaps,” stressing the need for targeted support.
The CPPE recommended lowering policy rates as inflation decelerates, creating a more favourable credit environment, and introducing concessional financing programmes and credit guarantees for SMEs and strategic sectors. It also called for stronger development financing tools to back infrastructure projects.
Mr Yusuf further emphasised the importance of embedding governance reforms, strengthening legal protections for the CBN’s autonomy, and ensuring clearer policy communication to guide market expectations.
“The next phase of reform must aim for a more balanced policy that supports growth while preserving macroeconomic stability,” he said. “Closing structural financing gaps and supporting governance reforms will be essential to unlocking the full potential of the financial sector as an engine of inclusive economic development.”
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