BORROWING COST FOR BUSINESSESThe interest rate is excessive

The borrowing cost for businesses in Nigeria is a major concern, with high interest rates being identified as a severe constraint affecting business operations. According to a recent report by the Central Bank of Nigeria (CBN), the high interest rate came out on top as a challenge, overtaking issues like insecurity and poor electricity supply.

The interbank lending rate in Nigeria surged to a high of 48% in January 2025, reflecting the CBN's aggressive monetary tightening measures. Despite this, there seems to be no solution in sight, as the Monetary Policy Committee (MPC) has retained the Monetary Policy Rate (MPR) at 14%, the rate at which the apex bank lends to commercial banks.

This high borrowing cost is significantly higher than in other leading African economies like South Africa, Egypt, and Algeria. The ripple effects of high borrowing costs include reduced profitability, limited expansion, and employment freeze.

It is imperative for the Nigerian monetary authority to revisit its monetary policy tools to ease lending costs and.