Easing Inflation May Trigger Interest Rate Cuts, Says LCCI

Easing Inflation May Trigger Interest Rate Cuts, Says LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has projected a decline in interest rates in the coming months, citing indications of easing inflation…READ MORE…

During a press briefing in Lagos on Thursday, LCCI President Gabriel Idahosa stated that the Central Bank of Nigeria’s Monetary Policy Committee (MPC) might soon shift toward a more accommodative monetary stance.

“We anticipate that the MPC may begin reducing interest rates within a few months as inflation moderates. However, it is essential for the government to remain focused on curbing inflationary pressures,” Idahosa cautioned.

The Chamber raised concerns about the impact of the current 27.5% monetary policy rate on Nigeria’s private sector, which it described as the backbone of the economy. LCCI argued that high borrowing costs are discouraging investment and diverting funds into government securities.

“Rate hikes alone cannot address inflation without resolving structural challenges in sectors like agriculture and manufacturing,” Idahosa added.

Inflation, which surged to 34.8% in December 2024—a near 30-year high—was attributed to factors such as insecurity, transportation costs, and climate change. Despite this, Idahosa expressed optimism that ongoing policy reforms could alleviate inflationary pressures if fiscal and monetary policies are harmonized to support agricultural productivity and address insecurity.

The Chamber also voiced concerns over the naira’s 40.9% depreciation against the dollar in 2024, blaming speculative trading and mismatched forex supply and demand. LCCI urged the government to boost forex inflows and ensure greater transparency in the exchange rate market to stabilize the naira.

While commending the 2025 “Budget of Restoration,” LCCI called for rigorous implementation to achieve its ambitious revenue target of ₦34.82 trillion. Idahosa highlighted the need for improved tax reforms, digital transparency, and the integration of the informal sector into the tax system.

LCCI also recommended reforms in agriculture, manufacturing, and the MSME (Micro, Small, and Medium Enterprises) sector, emphasizing the importance of expanding access to credit at lower rates and leveraging technology-driven lending platforms.

“The future of Nigeria’s economy hinges on targeted interventions, the removal of structural bottlenecks, and better alignment between fiscal and monetary policies,” Idahosa concluded, urging the government to take proactive measures to foster sustainable growth.

The Chamber reaffirmed its commitment to advocating for economic growth and a business-friendly environment while urging the media to continue amplifying its policy recommendations.

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