Overview
Nigeria’s Central Bank has doubled down on contractionary monetary policies, holding the Monetary Policy Rate at 27.5% and the Cash Reserve Ratio at 50% for Deposit Money Banks. These measures are designed to fight inflation, which hit 32.5% in 2024 before easing slightly to 22.22% by June 2025.
But while prices remain high, the trade-offs are clear: household consumption expenditure fell sharply, dropping by over 60% in Q2 2024 compared to the previous year, while businesses and banks face shrinking credit availability.
This article examines how these policies are reshaping Nigeria’s economy, from the strain on consumer spending and credit creation to the unintended effects of wage hikes and structural challenges such as unreliable power, high transport costs, and food insecurity.
It also sets out recommendations for government, businesses, and households to navigate this period, from targeted credit policies to alternative financing for SMEs.
Download the full report: Click Here
