IMF Wrong on Nigeria’s Interest Rates and Cash Transfer, Says CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has stated that the International Monetary Fund (IMF) is incorrect in its call for further interest rate increases in Nigeria.

CPPE made the comment in a statement released on Sunday by its chief executive officer, Muda Yusuf.

Earlier, the IMF’s recent Article IV Consultation Report on Nigeria praised President Bola Ahmed Tinubu’s government for its economic reforms.

Responding, the economic policy advocacy group said the Fund’s recognition of progress in restoring macro‑economic stability reflected views long held by the private sector.

However, CPPE argued that macro‑economic stability alone is insufficient, contending that the true measure of reforms is their impact on the living conditions of ordinary Nigerians.

The think tank warned that excessive monetary tightening, high interest rates and an overreliance on cash transfers could undermine inclusive growth.

CPPE also expressed concern over the IMF’s continued support for monetary tightening, warning that persistently high interest rates make credit unaffordable for businesses and discourage productive investment.

“The cost of credit in Nigeria has reached levels that are becoming increasingly prohibitive for productive investment. Lending rates remain among the highest in the world, making it difficult for businesses to expand, invest or create jobs,” it said.

“Exchange rate stability, reserve accumulation and fiscal consolidation are important, but the true test of reform is whether they translate into lower food prices, better jobs, improved incomes and enhanced living standards,” it added.

On social protection, CPPE questioned the continued emphasis on conditional cash transfers, arguing that government resources would yield greater long‑term benefits if invested in agriculture, transportation, healthcare, education and infrastructure.

“The most effective poverty reduction programme is one that reduces the cost of living and expands economic opportunities,” it stated.

Regarding Nigeria’s development finance, CPPE maintained that targeted intervention funding remains essential for sectors such as agriculture, manufacturing, housing and infrastructure, insisting that market‑based financing alone cannot address Nigeria’s structural funding gaps.

“Development finance is not merely a policy choice; it is an economic necessity,” the group noted, adding that agriculture and infrastructure projects require long‑term financing that commercial lenders are often unwilling or unable to provide.

CPPE also faulted the IMF report for paying insufficient attention to the role of state governments in driving economic reforms and reducing poverty.

According to CPPE, with increased federation allocations boosting state revenues, sub‑national governments now play a crucial role in areas such as food production, healthcare, education, rural infrastructure and security.

“Economic transformation in a federation cannot be driven from the centre alone,” the organisation said.