Author: user user

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) at its 306th meeting retained interest rates at 26.5 per cent as well as other monetary parameters.

Briefing newsmen after the meeting, the CBN Governor, Mr. Olayemi Cardoso stated that decision to hold the rates was taken as a result of thorough assessment of Nigeria’s economy and renewed tensions in the Middle East.

Amidst this significant macroeconomic decision, the credit to the private sector dropped by 11.19 per cent to N83.2 trillion as of June from N93 trillion in January this year, reflecting the tight monetary policy adopted by the apex bank.

What it means for businesses

The CBN had earlier mentioned that decision to hold rates, reflects ongoing concerns about inflation, liquidity in the financial system, and pressure on the naira.

By maintaining a high interest rate, the bank is essentially trying to discourage excessive borrowing and spending, which can fuel inflation.

Cost of borrowing to remain high

The decision by the MPC means that Commercial lending rates by banks will remain above 30 percent in many cases, meaning companies will continue paying high interest on bank loans.

Small and medium-sized enterprises (SMEs), which rely heavily on bank financing, are likely to also borrow at that

The high borrowing cost is reflected in the year-to-date shrink in credit to private sector (CPS) which dropped from N93.7 trillion in January 2026 to N83.2 trillion as of June this year.

According to the CBN’s money and credit statistics, the CPS however recorded a 2.73 per cent growth between May and June 2026, rising from N81.04 trillion to N83.2 trillion.

But the figure dropped 11.19 per cent year-to-day having started the year with N93.7 trillion.

The CPS includes loans, trade credits and other account receivables and supports provided by banks to the private sector within a period.

However, big companies with access to retained earnings or foreign financing may weather the high-rate environment better.

In the same vein, manufacturers borrowing to finance raw materials, equipment or working capital may continue to face elevated financing costs.

Many companies are expected to sustain increased product prices and reduce investment in new machinery.

Large companies to benefit more

In the same vein, big companies with access to retained earnings or foreign financing may weather the high-rate environment better.

Smaller businesses that depend almost entirely on local bank loans will remain under significant financial pressure.

For investors, the decision keeps Nigeria’s fixed-income market highly attractive.

Instruments like Treasury Bills, OMO bills, FGN bonds, money market funds, and commercial papers are expected to continue offering strong returns because interest rates remain elevated.

This means investors looking for relatively safer returns will likely continue to prefer these instruments over riskier assets like equities.

Impact on Nigerians

For ordinary Nigerians, Mortgage loans, personal loans, business loans among others are unlikely to see any reduction in borrowing costs.

However savings will remain attractive as one positive outcome is that banks may continue offering relatively attractive returns on savings and fixed deposits.

This means that pensioners, investors, individuals with substantial savings can earn better returns than during periods of lower interest rates.

Also, by keeping borrowing expensive, consumer spending and money supply are restrained, reducing demand pressures that contribute to rising prices.

Also, maintaining high interest rates generally supports the naira by making Nigerian financial assets more attractive to foreign investors.

Higher yields can encourage foreign portfolio investment, increasing foreign exchange inflows and helping stabilize the exchange rate.

What CBN said

The CBN governor said the committee resolved to ‘retain the monetary policy rate at 26.5 per cent.’

The MPC also retained the standing facilities corridor around the MPR, the Cash Reserve Ratio at 45 per cent for Deposit Money Banks, 16 per cent for Merchant Banks, and 75 per cent for non-Treasury Single Account public sector deposits.

Explaining the committee’s decision, Cardoso said members considered the balance of risks and concluded that maintaining the current policy stance remained the most appropriate option.

‘The committee’s decision to maintain the current policy stance followed a thorough assessment of the balance of risks. Although headline inflation moderated marginally in June 2026, global uncertainties have heightened due mainly to the renewed hostilities in the Middle East. In view of the evolving developments, maintaining a cautious monetary policy stance remains appropriate,’ he said.

According to him, the Nigerian banking system remains resilient. Cardoso disclosed that 33 of Nigeria’s 37 banks had met the new recapitalisation requirements without an extension of the deadline, describing the exercise as a major achievement.

He said the remaining banks remained under close regulatory supervision and were pursuing different regulatory options to achieve full compliance. ‘Those banks are under our guidance… you have nothing to worry about.’

He added that inflation was expected to moderate further over the medium term, aided by exchange rate stability, the lagged effects of previous monetary tightening and improved food supply during the harvest season.

In the same vein, Nigeria’s gross external reserves increased to $52.52bn as of July 17, 2026, from $50.47bn at the end of May, driven mainly by crude oil-related tax receipts and third-party inflows.

According to him, the reserves are sufficient to finance about 11 months of imports of goods and services, well above the international benchmark of three months.

He also said real Gross Domestic Product expanded by 3.89 per cent in the first quarter of 2026, supported mainly by the non-oil sector, while the Composite Purchasing Managers’ Index improved to 50.1 points in June from 49.6 points in May, signalling renewed expansion in business activity.

LCCI, expert react

A development Economist, Joseph Momoh who supported the MPC’s decision, said current global uncertainties have made a reduction in the Monetary Policy Rate difficult despite the effect it will have on businesses.

He noted that the decision meant lending rates would remain high, raising production costs for small businesses, but insisted holding rates was preferable to either increasing or reducing them under current conditions.

‘It is a good system because you can’t reduce it at this time, and increasing it will drive higher costs and negatively affect inflation,’ Momoh said

He added that there may come a time when MPC will consider rates reduction as manufacturers would continue to advocate lower borrowing costs to improve production and competitiveness.

President of the Lagos Chamber of Commerce and Industry (LCCI), Engr. Leye Kupoluyi said the decision to retain the key monetary policy parameters ‘has important implications for businesses and the broader Nigerian economy.’

‘By maintaining the Monetary Policy Rate (MPR) at 26.5%, the MPC reaffirmed its commitment to preserving price and exchange rate stability while containing inflationary pressures, particularly those arising from external shocks and heightened global uncertainty.

‘For businesses, the decision implies that borrowing costs will remain elevated in the near term, potentially constraining private sector investment, business expansion, and access to affordable credit, particularly for micro, small, and medium enterprises (MSMEs). However, the sustained tight monetary stance is expected to support exchange rate stability, improve investor confidence, and reduce foreign exchange volatility, thereby enhancing business planning and reducing currency-related risks.

‘Furthermore, the successful completion of the banking sector recapitalization is expected to strengthen banks’ lending capacity and support financing for productive sectors over the medium term.

‘For the Nigerian economy, the MPC’s decision reinforces macroeconomic stability by sustaining the disinflation process while maintaining confidence in the financial system. Although higher interest rates may moderate economic growth in the short term by dampening private investment and consumer spending, they are expected to help contain inflation, strengthen external reserves, preserve exchange rate stability, and improve the economy’s resilience to global shocks.’

The chamber said to maximise the gains, the authorities must carry out ‘complementary fiscal and structural reforms aimed at boosting domestic production, improving infrastructure, enhancing revenue mobilization, and reducing the cost of doing business, which remain essential.’

By order of the omniscient elders of the bleeding continent

Fellow Nigerians, compatriots in perpetual struggle, and citizens of a nation that runs on ‘God dey’ and generator fumes, it is that time again. Time to look away from the price of rice for a moment and gaze upon the global circus. Because if the world is a stage, the current scriptwriters are clearly on strike, and the understudies-armed with RPGs and propaganda-have taken over.

Let us begin with the distant thunder that sounds suspiciously like a Western-made bomb. The Iran war has resumed, and the word ‘ground invasion’ is being tossed around like a dish of jollof at a family wedding. On the surface, this is a Persian problem. But let’s be honest: if the Gulf boils over, your NEPA bill will not just increase; it will achieve sentience and demand a ransom. Global oil prices will spike higher than an Abuja socialite’s hemline. The subsidy that we are famously not paying will somehow find its way back into the budget as ‘under-recovery,’ and the average Nigerian will be left to explain to his fuel tank why it must accept air as a substitute.

If the war persists, expect the dollar to ascend to divine status. The Naira will devalue so fast it will start paying taxes in the past tense. We will import inflation while exporting our most talented youth through the ‘Japa’ route. Geopolitically, it is a disaster. Economically, for Nigeria, it is a Tuesday-just a more expensive one.

Meanwhile, a few thousand miles south, our brothers and sisters in South Africa are engaging in what I can only describe as ‘xenophobic aerobics.’ They have dug in, tooth and nail, unapologetic and blatant, as if fueled by a national energy drink called ‘It’s Our Turn to be Angry.’ The public analyst, David Hundeyin, has thrown a fascinating spanner in the works. He suggests this isn’t just spontaneous combustion of bigotry, but a carefully funded operation. Apparently, Zionist Israel is allegedly funding these activists to sow discord, aiming to discredit South Africa’s moral high ground at the ICC regarding Gaza.

If this hypothesis holds water-and in a continent where water is often scarce, it’s worth a look-then we are witnessing a masterclass in psychological warfare. It is mass hypnosis, funded by foreign shekels. Israel has long despised Africa’s pro-Palestine stance, and if vengeance is a dish best served cold, they are serving it with a side of ‘Braai’ and anti-African sentiment. The result? We are fighting each other while the world’s superpowers sip tea and decide our borders. Nigeria, the self-appointed ‘Giant of Africa,’ is watching this unfold while battling its own demons, effectively rendered mute by the sheer scale of our domestic insanity.

Speaking of which, let’s come home to the theater of the absurd, headlined by the ‘Fake Agency Scandal.’ President Tinubu, in a move that seemed proactive, ordered a police investigation. They delivered a report. The president, however, was not satisfied. He ordered another investigation by the ICPC. Let us pause to appreciate this magnificent self-owning.

The fact that the Commander-in-Chief essentially looked at the findings of the Nigeria Police Force and said, ‘Hmm, this seems too competent, let’s get the real experts,’ is the most damning diagnostic of our civil institutions since the last time a minister ‘misplaced’ a billion naira. It means the police are so thoroughly compromised, so institutionally decayed, that their own conclusion is viewed with suspicion by the government that employs them. This is like a doctor telling you that your blood test results are so wrong that you need to see Mallam Babalawo for a second opinion.

If the president doesn’t trust the police to investigate the circumstances surrounding a fake agency, a glorified 419 syndicate, then what happens when a real agency with real money needs investigating? In such an environment, anything goes. If you have the cash and the connections, you can build a ministry, hire staff, print letterheads, and start defrauding foreign governments in the name of Nigeria. The police will investigate, find nothing, and the president will order another investigation by the EFCC… or ICPC of it is serious enough, who will also ‘find nothing’ while the whistleblower goes into exile.

This leads us to our next PSA: the case of the female federal civil servant found dead at the residence of the current Minister of Works. Yet, the silence is deafening. In a functional society, the minister would have resigned before the body was cold. It would be front-page news in every newspaper, the lead story on every channel. The minister would be in handcuffs, giving a press conference via his lawyer.

Here, crickets are the dominant species. Most Nigerians haven’t heard about it because we are too busy mourning the price of pure water. This isn’t just a tragedy; it’s a symptom. This is why a fake agency could exist.in the first place. It is why the NPF is a glorified roadblock agency. It is why we are surprised when a minister is asked to account for his budget. We have normalised the abnormal. We have accepted that power is a shield against consequences. The minister sits, the investigation (if any) is a ghost, and the public forgets because another bandit just kidnapped a whole village in Zamfara.

So, what does all this augur for the regular Nigerian?

It augurs for a future where we are at the mercy of a global elite that orchestrates hate to distract us, while our local elite perfects the art of orchestrated incompetence. The Iranian war will make us poorer. The South African crisis will make us more isolated, proving that ‘African unity’ is a myth we sing about in primary school. The fake agency scandal proves that the government is fighting a ghost while the real criminals walk among us. The minister’s saga proves that if you are powerful enough, you can be above the law.

We are trapped in a vicious cycle of mass hypnosis. We are distracted by petrol, paralysed by poverty, and pacified by religion. We are an empire of potential ruled by a bureaucracy of mediocrity. The Iran war is an external threat; the South African crisis is an external distraction; but the rot is internal. It is in the police station, the ministry, and apparently in Aso Rock too.

This is your public service announcement: We are not merely watching a tragedy; we are living in a comedy where the punchline is always our suffering.

The message is clear: Wake up, or prepare to be the supporting cast in a global production where you are always the one who gets bombed, betrayed, or buried in silence. As for the future? It is coming, and it’s bringing a bill.

Are you ready to pay?