Nigerian lawmakers have urged the Central Bank of Nigeria (CBN) to refrain from increasing interest rates beyond the current 27.5% as part of efforts to curb inflation, warning that such a move could negatively affect employment across key sectors.
The caution comes ahead of the CBN’s 300th Monetary Policy Committee (MPC) meeting, scheduled for next week. At its 299th session in February, the Committee, led by CBN Governor Olayemi Cardoso, maintained the Monetary Policy Rate (MPR) at 27.5%, a level first reached in November 2024.
Speaking during a meeting with the Statistician-General of the Federation and Chief Executive Officer of the National Bureau of Statistics (NBS), Mr Adeyemi Adeniran, Chairman of the House of Representatives Committee on National Planning and Economic Development, Hon. Gboyega Nasir Isiaka, highlighted the impact of high interest rates on employment.
He explained that the manufacturing, agricultural, and small and medium enterprise (SME) sectors — which are vital employers of labour — have been adversely affected.
“The Monetary Policy Rate has been raised 10 times since January 2023, from 16.5% to 27.5%, in a bid to tackle inflation,” he said. “While this approach has helped stabilise the economy and rebuild investor confidence, we must acknowledge that structural bottlenecks and supply chain inefficiencies have limited its effectiveness.”
He further appealed to the monetary authorities to adopt a more balanced approach that not only targets inflation control but also fosters economic growth and job creation.
Declining Unemployment, but Youth and Gender Gaps Remain
In his remarks, Mr Adeniran of the NBS revealed that Nigeria’s unemployment rate dropped to 4.3% in the second quarter of 2024, down from 5.3% in the first quarter. However, disparities persist across demographics.
He reported that unemployment was higher among women (5.1%) compared to men (3.4%), and in urban areas (5.2%) compared to rural areas (2.8%).
The youth population remains particularly vulnerable, with a 6.5% unemployment rate. Additionally, 12.5% of young Nigerians were not engaged in employment, education, or training (NEET), with the figure rising to 14.3% among young women compared to 10.9% among young men.
Mr Adeniran confirmed that the third and fourth quarter employment reports for 2024 were being finalised and would be published in due course.
What You Should Know
- The MPC comprises 12 members, including the CBN Governor as Chairman.
- The Committee operates under the CBN Act of 2007, with the mandate to set monetary policy parameters and ensure price stability.
- The MPC monitors key indicators such as the inflation rate (currently above target), GDP growth, exchange rate dynamics, and fiscal-monetary alignment.