MAN and LCCI Praise CBN's MPR Cut Amid Lending Concerns

The Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) praised the Central Bank of Nigeria's (CBN) decision to cut the Monetary Policy Rate (MPR), viewing it as a positive step towards alleviating pressure on the real sector. Segun Ajayi-Kadir, the Director-General of MAN, noted that this action reflects the CBN's responsiveness to the business community's calls.

Chinyere Almona, the Director-General of LCCI, described the decision as a significant easing of monetary conditions. However, both organizations raised concerns regarding the transmission of the MPR cut to actual lending rates, citing past experiences where banks did not adequately lower rates despite MPR reductions.

The International Monetary Fund (IMF) echoed these concerns, highlighting that banks quickly implement MPR increases but delay reductions. The IMF reported that a 100-basis-point increase in MPR typically results in a 180-basis-point rise in lending rates, while a similar decrease only leads to a 30-basis-point drop.

The pressure groups also criticized the MPR cut as insufficient to significantly reduce production costs and enhance the competitiveness of Nigerian manufactured goods.