Experts Call for a Growth-First Monetary Strategy
Leading economists, including Prof. Bongo Adi of Lagos Business School, are urging the Nigerian federal government to pivot from an exclusive focus on macroeconomic stability toward policies that actively stimulate growth. The proposal centers on reducing the Monetary Policy Rate (MPR) to unlock lending, foster investment, and raise living standards across the country.
Why a Cut in MPR Could Help Nigeria
The MPR set by the Central Bank of Nigeria (CBN) influences borrowing costs for businesses and households. A lower rate can stimulate credit creation, support small and medium enterprises, and catalyze job creation in a challenging economic climate. Proponents argue that, after stabilizing inflation and exchange rate expectations, a measured MPR reduction could boost aggregate demand without sacrificing long-run price stability.
Balancing Growth with Inflation
Critics warn that cutting the MPR could reignite inflation if not paired with credible policy signals. Lagos Business School’s Prof. Adi emphasizes a gradual, data-driven approach, paired with strong fiscal discipline. The goal is to sustain growth while maintaining inflation within the central bank’s target band, ensuring that gains in output do not erode purchasing power.
Policy Consistency as a Growth Lever
Beyond rate cuts, experts stress the importance of policy consistency. Sudden shifts or mixed messages from authorities undermine investor confidence and can stall growth plans. A stable policy framework—where monetary easing is clearly linked to a transparent medium-term growth agenda—could attract investments, stabilize markets, and reduce the risk premium demanded by lenders.
Coordinated Economic Strategy
Prof. Adi notes that monetary policy should align with fiscal strategies, exchange rate management, and structural reforms. Coordinated actions, such as targeted credit programs for export-oriented sectors, infrastructure investment, and supportive regulatory environments, can magnify the impact of a lower MPR. When multiple policy levers move in concert, Nigeria stands a better chance of achieving sustainable growth that translates into higher wages and improved living standards.
<h2 Implementation Considerations
Any proposal to cut the MPR must consider timing, sequencing, and communication. A phased approach—starting with a modest reduction, followed by a cautious assessment of macro indicators—can mitigate risks. Clear forward guidance on future policy moves helps markets price risk more accurately and reduces volatility.
<h2 The Role of Data and Analysis
Data-driven decisions are central to the argument for growth-oriented monetary policy. Lagos Business School’s emphasis on econometric analysis and real-time indicators supports the case for a nuanced approach to the MPR. By monitoring indicators such as credit growth, non-performing loans, inflation expectations, and unemployment, policymakers can adjust the trajectory to sustain momentum.
<h2 What This Means for Nigerians
A shift toward growth-focused policy could lower unemployment, widen financial inclusion, and raise living standards. Consumers may benefit from easier credit access for home improvements, education, and small-business expansion. For the Nigerian economy, stable growth—not just stability—could translate into resilience against shocks and a more dynamic private sector.
<h2 Conclusion
As Nigeria navigates complex global and domestic pressures, a balanced, growth-forward monetary stance paired with policy consistency offers a plausible path to stronger economic outcomes. The dialogue among economists, including Prof. Bongo Adi, signals a possible redefinition of priorities: from stabilizing indicators to delivering tangible improvements in people’s lives through growth that is sustainable and well-managed.
