Business

OPS reacts on CBN’s interest rates reduction

Published

7 months ago

September 24, 2025

The Monetary Policy Committee of the Central Bank of Nigeria has reduced the country’s benchmark interest rate to 27.00 per cent, the first cut in 2025 after three consecutive pauses, signaling a shift in policy towards supporting economic recovery.

While welcoming the move, members of the Organised Private Sector argued that the reduction remains marginal and insufficient to ease the credit squeeze on manufacturers and small businesses.

Announcing the decision at a press briefing on Tuesday in Abuja after the committee’s 302nd meeting, CBN Governor Olayemi Cardoso said all 12 members voted in favour of a 50-basis point cut from 27.5 per cent.

The committee also adjusted the Standing Facilities corridor to +250/-250 basis points, raised the Cash Reserve Requirement for commercial banks to 45 per cent while retaining merchant banks at 16 per cent, and introduced a 75 per cent CRR on non-TSA public sector deposits. The Liquidity Ratio was left unchanged at 30 per cent.

Cardoso explained that the decision was underpinned by “sustained disinflation recorded in the past five months, projections of declining inflation for the rest of 2025, and the need to support economic recovery efforts.”

The MPC noted that headline inflation slowed to 20.12 per cent in August from 21.88 per cent in July. Food inflation fell to 21.87 per cent from 22.74 per cent, while core inflation eased to 20.33 per cent from 21.33 per cent. On a month-to-month basis, inflation dropped sharply to 0.74 per cent in August compared with 1.99 per cent in July.

“This reduction is the first under my leadership and the first in five years,” Cardoso noted. The last time Nigeria cut its policy rate was in September 2020, when it dropped from 12.5 per cent to 11.5 per cent.

Across Africa, a similar trend is unfolding. Just last week, Ghana slashed its policy rate by 350 basis points to 21.5 per cent, while Kenya reduced its benchmark to 9.5 per cent in August. Nigeria’s cut, however, still leaves it with one of the highest rates on the continent.

The MPC also highlighted positive macroeconomic trends, particularly Nigeria’s second-quarter GDP growth of 4.23 per cent, up from 3.13 per cent in the first quarter.

The rebound was largely driven by the oil sector, which expanded by 20.46 per cent compared with just 1.87 per cent in the previous quarter.

The committee commended the Federal Government for improved security in oil-producing regions, noting that sustained production growth would strengthen external reserves and stabilize the naira.

Foreign reserves rose to $43.05bn as of September 11, 2025, up from $40.51bn at the end of July, providing an import cover of 8.28 months. The current account balance also recorded a surplus of $5.28bn in Q2, up from $2.85bn in Q1.

Cardoso disclosed that 14 banks had already met the new recapitalisation requirements, with the sector remaining resilient and financial soundness indicators within prudential benchmarks.

Looking ahead, the MPC projected continued disinflation, supported by exchange rate stability, declining petrol prices, and the harvest season. The next MPC meeting is scheduled for November 24–25, 2025.

OPS reacts

While the rate cut was widely acknowledged as a step in the right direction, members of the Organised Private Sector argued that the reduction remains marginal and insufficient to ease the credit squeeze on manufacturers and small businesses.

Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, described the cut as welcome but inadequate. “Virtually every time the MPC meets, what we anticipate is a reduction in rates. This is welcome, but it has not gotten us anywhere near our expectations. Manufacturers need to borrow at no more than five per cent for that borrowing to be supportive of production,” he said.

Ajayi-Kadir emphasised that no bank would lend at a rate below the MPR, meaning credit costs remain unaffordable. “It signals a rethinking by the CBN, but manufacturers still await a time when rates will be significantly lower,” he added.

Similarly, the Director-General of the Nigeria Employers’ Consultative Association (NECA), Adewale Oyerinde, warned that the cut’s impact might be undermined by other restrictive measures such as the high CRR. “If credit costs are lowered, businesses can access affordable financing, expand investments, and create jobs. But the persistently high CRR and liquidity restrictions risk limiting these outcomes,” Oyerinde said.

He pointed out that while inflation moderated in August, food inflation at 21.87 per cent continues to erode disposable incomes. “Macroeconomic stability must translate into tangible relief for Nigerians,” he added, urging the government to complement monetary policy with structural reforms.

The President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, called the rate cut a “good start” but “insignificant” in the broader context. “Compared to other developing countries, ours still ranks among the highest. Access to finance remains the number one challenge of SMEs. A 0.5 reduction is insignificant compared to the pressure on the real sector,” he said.

Egbesola called for special credit windows at single-digit rates for small businesses, stressing that alternative funding sources beyond banks must also be explored.

The Centre for the Promotion of Private Enterprise echoed similar sentiments, commending the MPC’s move but stressing the need for complementary fiscal reforms.

Its Director, Dr Muda Yusuf, described the rate cut as “a welcome and timely intervention,” adding that the lower MPR combined with a reduced CRR should expand banks’ capacity to create credit and lower lending rates. This will support business expansion, stimulate output growth, and create jobs,” Yusuf said.

He, however, stressed that monetary easing alone is not enough. “Fiscal authorities must prioritise infrastructure to reduce production costs, strengthen the regulatory framework, and sustain fiscal consolidation to ensure macroeconomic stability and investor confidence,” he said.

Yusuf further urged the government to address insecurity, which continues to threaten private investment and rural productivity.

Observers agree that the CBN’s decision marks a significant shift in monetary policy, moving from stabilisation towards growth acceleration. Analysts note that while inflation remains elevated, the trend of disinflation provides room for cautious easing to support recovery.

For manufacturers, small businesses, and employers, the cut is a signal of intent but falls short of delivering immediate relief. The consensus across the OPS is that credit costs must drop significantly further, ideally into single digits, to unlock the full potential of Nigeria’s productive sectors.

As Yusuf summed it up: “If sustained and backed by fiscal and structural reforms, the new stance could stimulate growth, improve private sector performance, boost revenues, and moderate inflation sustainably in the medium to long term.”

On its part, the Nigeria Labour Congress described the CBN’s reduction of the Monetary Policy Rate from 27.50 per cent to 27 per cent as a step in the right direction, but cautioned that borrowing costs remain prohibitively high for businesses.

The Assistant Secretary-General of the NLC, Onyekachi Christopher, told The PUNCH that while it is encouraging that policymakers are considering rate reductions, the current level of 27 per cent remains very high.

“As an organisation advocating for the welfare of workers, we hope to see manufacturers gain better access to financing, produce more goods, hire additional employees, and contribute more meaningfully to the economy,” Onyekachi said. “Easier access to bank loans would support these goals, creating long-term benefits for both businesses and workers.”

Professor of Economics and former Vice-Chancellor of Crescent University, Abeokuta, Sheriffdeen Tella, said while interest rate theory is more applicable in advanced economies, it remains relevant for Nigeria.

“The CBN likely felt it could reduce rates now that inflation is coming down. High interest rates increase borrowing costs, which in turn raise production costs for businesses. At current levels, borrowing is still unattractive because profits rarely exceed 20–30 per cent annually, making loans hard to justify. Although the reduction is a positive start, rates remain relatively high,” he said.

Former Zenith Bank Chief Economist Marcel Okeke said the rate cut signals the beginning of a loosening in the CBN’s tight monetary stance. “The Monetary Policy Rate is largely indicative. It signals to commercial banks that they may start easing their lending rates rather than keeping them high continuously. Essentially, it shows that the CBN is beginning to loosen its tight monetary stance,” he said.

Okeke noted that historically, high lending rates were driven by the CBN’s tight policy, which pushed the MPR to around 27.5 per cent. “This reduction is the start of reversing that trend. Even if banks only reduce rates by 1–2 per cent, it is symbolic but meaningful. In the next CBN meeting in November, further reductions could follow if inflation continues to decline,” the economist added.

He highlighted that inflation has fallen from almost 35 per cent in December 2024 to about 20.13 per cent in August 2025. “If it continues to fall to around 17–18 per cent, the CBN is likely to reduce the NPR further.

“Lower interest rates make loans more affordable, increasing access to credit and stimulating economic activity. However, the effect isn’t immediate; there is a time lag between policy implementation and visible impact. Further cuts will also depend on exchange rate stability and inflation trends,” Okeke said.

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Business

NNPC April crude supplies to Dangote cross 1bn barrels

Published

14 hours ago

April 22, 2026

Newsbreak365_Admin

Crude oil supply from the Nigerian National Petroleum Company Limited’s trading arm surged in April 2026, with shipment records indicating that more than 1.03 million metric tonnes, equivalent to about 6.8 million barrels or over 1.08 billion litres, were delivered to the Dangote Oil and Gas Company Limited within the month.

An analysis of tanker vessel movements obtained by The PUNCH on Tuesday shows that the deliveries were executed through eight crude cargoes handled by NNPC Trading, reinforcing the state oil firm’s role as a major feedstock supplier to the 650,000 barrels-per-day Dangote refinery.

The shipments, sourced from key Nigerian crude streams including Anyala, Bonga, Odudu, Forcados, Qua Iboe, and Utapate, were routed through the refinery’s Single Point Mooring systems, SPM-C1 and SPM-C2.

The document shows that out of the eight cargoes, five have been fully discharged, while three others are still awaiting berthing or completion, indicating a steady pipeline of crude inflows into the refinery.

This development comes amid the refinery’s continued complaints of supply inadequacies, with a total requirement of 19 cargoes monthly, and a recent report that the country imported 55.39 million barrels in January and February 2026.

A breakdown of the deliveries showed that Sonangol Kalandula initiated the supply chain, delivering 123,000 metric tonnes of crude from Anyala. The vessel arrived on April 5, berthed on April 8, and sailed on April 9.

This was followed by Advantage Spring, which supplied 128,190 metric tonnes from Bonga, arriving on April 11 and completing discharge by April 13.

Similarly, a vessel code-named Barbarosa delivered 125,000 metric tonnes from Odudu, while Sonangol Njinga Mban transported 129,089 metric tonnes from Bonga.

Another completed shipment, handled by Nordic Tellus, brought in 139,066 metric tonnes from Forcados, completing discharge on April 17.

However, three additional cargoes remain in progress. Advantage Sun, carrying 142,327 metric tonnes from Bonga, has arrived but is yet to berth. Also pending are Advantage Spring from Utapate with 120,189 metric tonnes, and Sonangol Kalandula from Qua Iboe with 126,471 metric tonnes.

In total, the NNPC Trading cargoes account for 1,033,332 metric tonnes of crude, underscoring what industry analysts describe as a “strong and sustained supply commitment” to the Dangote refinery.

Further findings show that, beyond crude deliveries, the Dangote refinery also received multiple shipments of refined products and blending components from international markets during the period.

Among them, Seaways Lonsdale delivered 37,400 metric tonnes of blendstock gasoline from Immingham, United Kingdom, handled by Vitol, between April 18 and 19.

Another vessel, Augenstern, supplied 37,125 metric tonnes of Premium Motor Spirit from Lavera, France, discharging between April 8 and 9.

From Norway, Emma Grace brought in 37,496 metric tonnes of PMS from Mongstad, while LVM Aaron delivered 36,323 metric tonnes from Lome, Togo.

Similarly, Egret discharged 35,498 metric tonnes of naphtha from Rotterdam between April 16 and 18, providing critical feedstock for gasoline blending.

A pending shipment, Mont Blanc I, carrying 36,877 metric tonnes of blendstock gasoline from Antwerp, Belgium, is yet to berth, while Aesop is expected to deliver 130,000 metric tonnes of residue catalytic oil from Singapore later in April.

In addition to NNPC Trading volumes, other crude cargoes from international and domestic traders also supported refinery operations.

Notably, Yasa Hercules delivered 273,287 metric tonnes of crude from Corpus Christi, United States, while Front Orkla brought in 264,889 metric tonnes from Ingleside, US.

A major cargo, Navig8 Passion, supplied 496,330 metric tonnes of crude from Cameroon, highlighting regional supply integration.

Domestic contributions included Harmonic, which delivered nearly 993,240 barrels from Ugo Ocha, and Aura M, which supplied 1 million barrels from Escravos, alongside an additional 651,331 barrels of cargo from Anyala.

Operational data indicate that most vessels berthed within one to two days of arrival and departed shortly after discharge, suggesting improved efficiency at the refinery’s offshore terminals.

The Dangote refinery, located in Lekki, Lagos, is Africa’s largest single-train refinery, with a nameplate capacity of 650,000 barrels per day.

The facility is expected to significantly reduce Nigeria’s dependence on imported petroleum products by refining domestic crude and supplying petrol, diesel, aviation fuel, and other derivatives to the local market.

NNPC Limited, through its trading arm, has remained a central player in supplying crude to the refinery under evolving commercial arrangements, amid ongoing reforms in Nigeria’s downstream oil sector.

Earlier this month, Africa’s richest man and President of the Dangote Group, Aliko Dangote, revealed in a report by Bloomberg that the refinery received 10 cargoes of crude oil from the state-owned oil firm in March, compared to an average of about five cargoes monthly since late 2024.

Dangote said the shipments included six cargoes paid for in naira and four in dollars, under the crude supply arrangement between the refinery and the NNPC.

“Nigeria doubled crude supply to Dangote Refinery in March as Africa’s top oil producer moved to shore up fuel availability after the Iran war disrupted Middle East shipments. Last month, they gave us six cargoes with payments in naira and four cargoes with payments in dollars,” he stated.

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Business

CBN, NCC to combat SIM-related fraud

Published

2 days ago

April 21, 2026

Newsbreak365_Admin

The Central Bank of Nigeria and the Nigerian Communications Commission on Monday signed a memorandum of understanding to tackle SIM-related fraud and strengthen consumer protection across Nigeria’s digital ecosystem.

The agreement, signed at the CBN headquarters in Abuja, aims to improve coordination between the financial and telecommunications sectors, focusing on combating electronic fraud linked to mobile numbers, enhancing payment system integrity, and protecting consumers.

Speaking at the event, the CBN Governor, Olayemi Cardoso, said the pact was a “practical statement of national interest”, noting that the increasing reliance on digital channels for payments and financial services required stronger collaboration between both regulators.

He said, “This MoU is not merely an administrative document; it is a practical statement of national interest,” adding that the agreement would reinforce the stability and integrity of Nigeria’s payment system while supporting innovation and consumer safety.

Cardoso explained that the deal would strengthen coordination on approvals, technical standards, and innovation trials, including sandbox testing, to ensure that financial services remain reliable and scalable.

He noted that the partnership would also improve the response to rising electronic fraud, stressing that “addressing these threats requires joined-up action, shared intelligence, clearer escalation paths, stronger operational readiness across regulated entities, and consistent public education”.

A key component of the agreement is the rollout of the Telecom Identity Risk Management Portal, a data-sharing platform designed to detect fraud linked to recycled, swapped, or blacklisted phone numbers.

According to Cardoso, the platform would enable real-time verification of mobile number status across banks and fintech firms, providing an additional layer of protection for consumers and the financial system.

He said strict compliance with data protection laws, including encryption and consent protocols, would guide the use of the platform.

Also speaking, the Executive Vice Chairman of the NCC, Aminu Maida, described the agreement as a major step in strengthening Nigeria’s digital economy.

He said, “The signing of this Memorandum of Understanding marks an important milestone in the regulatory stewardship of Nigeria’s digital economy,” adding that collaboration between both institutions was “not optional; it is imperative.”

Maida noted that the initiative would give financial institutions better visibility into the status of phone numbers used in transactions, including whether a line had been swapped, recycled, or flagged for fraudulent activity.

“This ensures that our financial services industry is better equipped with timely and relevant information to effectively combat e-fraud, particularly those perpetrated using phone numbers,” he said.

He added that the agreement would also improve consumer protection, assuring Nigerians that issues such as failed airtime recharges would be resolved more quickly under the new framework.

Earlier, the Director of Payment System Supervision at the CBN, Dr Rakiya Yusuf, said the partnership between both regulators had evolved over the years from separate oversight roles into a more integrated collaboration focused on securing Nigeria’s digital and financial systems.

She traced the relationship back to earlier efforts to align mobile payment regulations and telecom licensing frameworks, including the 2018 MoU that enabled telecom operators to participate in mobile money services through special purpose vehicles.

She also highlighted joint interventions such as the resolution of the USSD pricing dispute and the introduction of a N6.98 per session fee, as well as recent efforts to address failed transactions through a proposed 30-second refund framework.

Under the new agreement, two joint committees will be established to drive implementation. These include the Joint Committee on Payment Systems and Consumer Protection and the Joint Committee on the telecom risk management platform.

The agreement is expected to deepen digital financial inclusion, reduce fraud risks, and strengthen trust in Nigeria’s rapidly expanding digital economy.

The PUNCH earlier reported that the CBN and the NCC unveiled a joint framework to tackle the growing problem of failed airtime and data transactions, which have left consumers frustrated after payments are processed but service delivery is not provided.

The 20-page draft, published on the CBN’s website, was developed by the CBN’s Consumer Protection & Financial Inclusion Department and the telecom regulator, with input from banks, mobile operators, payment providers, and other stakeholders.

The regulators seek to clarify accountability, standardise complaint-resolution timelines, and create a coordinated system for addressing grievances across the financial and telecommunications sectors.

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Business

Electricity reforms: Rivers, Kano, 19 others delay takeover

Published

2 days ago

April 21, 2026

Newsbreak365_Admin

Twenty-one states, including Rivers and Kano, are yet to assume regulatory control of their electricity markets nearly three years after the enactment of the Electricity Act 2023, even as 15 states have already transitioned to independent market oversight.

The Nigerian Electricity Regulatory Commission disclosed that the states that have completed the transition have established their own electricity regulatory frameworks and are now responsible for market development, investment attraction, tariff oversight, and customer protection within their jurisdictions.

According to the commission, the shift follows the decentralisation provisions of the Electricity Act 2023, which empower subnational governments to regulate electricity generation, transmission and distribution within their territories after completing the necessary legal and administrative processes.

NERC noted that 15 states have so far completed the transition to state-level regulation. These include Enugu, Ekiti, Ondo, Imo, Oyo, Edo, Kogi, Lagos, Ogun, Niger, Plateau, Abia, Nasarawa, Anambra and Bayelsa.

However, the remaining 21 states yet to assume regulatory control are Adamawa, Akwa Ibom, Bauchi, Benue, Borno, Cross River, Delta, Ebonyi, Gombe, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kwara, Osun, Rivers, Sokoto, Taraba, Yobe and Zamfara.

Industry analysts said the slow pace of transition in some states could delay the expected benefits of decentralisation, including improved power supply, localised tariff structures, and accelerated investments in embedded generation and mini-grid projects.

Under the new framework, once a state completes its transition, the state electricity regulator takes over licensing of intrastate electricity operations, enforcement of technical standards, tariff setting for local distribution, and protection of electricity consumers within the state.

NERC, in turn, retains oversight only on interstate and national grid-related activities.

The commission emphasised that state regulators are expected to drive local electricity market growth by encouraging private sector participation, promoting renewable energy deployment, and ensuring service quality standards for distribution companies operating within their jurisdictions.

The timeline released by the commission shows that the earliest transitions occurred in October 2024, when Enugu and Ekiti states assumed regulatory authority, followed by Ondo shortly after. The pace accelerated in 2025, with several states, including Oyo, Edo, Lagos and Ogun, completing their transitions. The most recent additions include Nasarawa, Anambra and Bayelsa between January and February 2026.

It was observed, however, that some of the 15 states have not set up their regulatory commissions.

Power sector stakeholders argue that states yet to transition risk missing opportunities to attract investments in off-grid electrification projects, particularly in underserved rural communities.

They also note that state-level regulation could help address longstanding distribution challenges by enabling more flexible tariff structures, targeted subsidies, and enforcement mechanisms tailored to local conditions.

With less than half of the states having completed the transition, many argued that the effectiveness of the Electricity Act reforms will largely depend on how quickly the remaining states establish their regulatory institutions and operational frameworks.

Apparently overwhelmed by the country’s power woes, the Federal Government recently pushed the challenge to the 36 states, asking them to take over power generation, transmission, and distribution.

The Federal Government said this was the only solution to the power crisis in the country.

The Minister of Power, Adebayo Adelabu, said at an energy summit in Lagos that the Electricity Act’s impact includes decentralisation and liberalisation.

“In a country as big as Nigeria, with almost a million square kilometres of landmass, over 200 million people, millions of businesses, thousands of institutions (health and educational institutions), 36 states plus the Federal Capital Territory, and 774 local governments—centralisation cannot work for us. The responsibility of providing stable electricity can never be left in the hands of the Federal Government.

“At the centre, you cannot, from Abuja, guarantee stable power across the country. So, this is one thing that the Act has achieved—decentralisation. That has now allowed all the states or the subnationals to play in all segments of the power sector value chain—generation, transmission, distribution, and even service industries supporting the power sector,” he stated.

He called on the remaining 21 states to set up their electricity market.

“I believe other states will follow suit in operationalising the autonomy granted, with full collaboration of the national regulator. We are working actively with these states to ensure strong alignment between the wholesale market and the retail market.

“In this regard, we believe the active involvement of the state governments, particularly in the off-grid segment, is critical, given the series of roundtable engagements held with governors by the Rural Electrification Agency, as well as ongoing efforts to closely track the distribution companies’ performances within their respective jurisdictions,” Adelabu emphasised.

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