Leading economic experts in Nigeria have called on the Federal Government to implement a reduction in the Monetary Policy Rate (MPR) while emphasizing the critical need for policy consistency to drive meaningful economic growth and improve living standards for citizens.
Shifting Focus from Stability to Growth
Professor Bongo Adi, a distinguished professor of economics and data analysis at Lagos Business School, has advised the federal government to pivot its economic strategy. He recommends moving the primary focus from achieving macroeconomic stability to actively stimulating growth, a shift he believes could significantly enhance the welfare of Nigerians.
Adi presented his analysis during the recent launch of CFG Africa’s Ethical Fund and the organization’s clients and engagement forum. The event, held in Lagos over the weekend, was themed “2026 in focus: opportunities for growth, navigating uncharted terrains,” and aimed to provide insights into the market outlook for the coming year.
According to the professor, a key lever for triggering this growth is reducing the monetary policy rate. He argued that this move would encourage vital investment and foster job creation across the economy. Reducing interest rates, Adi noted, would provide crucial support to the manufacturing sector, which possesses high employment elasticity, ultimately leading to broader economic expansion.
Underlying Economic Contradictions and Reform Progress
Despite acknowledging the country's current growth trajectory, Professor Adi highlighted several underlying issues that pose a threat to sustained progress. He identified key contradictions, including problems with forecasting, foreign exchange (FX) inconsistencies, a GDP deflator weight gap, a growth trap, and a debt trap.
He elaborated on the GDP deflator weight gap, explaining that it reveals a significant discrepancy between nominal GDP and real GDP. This means businesses are effectively paying more than what consumers are experiencing in the market. Adi also pointed to the growth trap, where the economy is growing at a reported 4.2 per cent, but this growth fails to translate into meaningful development, especially when measured against the nation's population growth.
Offering a complementary perspective, Babajide Lawani, the Managing Director and CEO of CFG Africa, stated that the current administration's economic reforms are beginning to yield positive results. He pointed to significant improvements in the foreign exchange situation and a notable drop in inflation as evidence that the reforms are gaining traction.
“We have noted that Nigeria’s economy is growing, and the reforms by the current administration are actually paying off,” Lawani said. He highlighted improvements in the demand-supply dynamics around foreign exchange and a significant drop in inflation, contributing to more robust economic growth.
However, Lawani also urged the government to sustain the reforms and focus on the next phase: transforming the economy. “We need to now move from growth to transformation because that transformation is what is really going to bring about sustainable growth and a better life for Nigerians,” he emphasized.
The Call for Policy Consistency and Future Outlook
Echoing the sentiment on the positive economic trends, Adedoyin Wilson-Diamond, Chief Investment Officer at CFG Africa, also acknowledged improvements, particularly in the foreign exchange space and inflation. She credited the current administration's policies for bringing down exchange rates and curbing inflation.
Wilson-Diamond expressed optimism for the financial market in 2026, predicting continued improvement which would make it easier for both corporates and individuals to participate. When asked about areas requiring attention, she strongly emphasized the need for consistency in policy implementation. She advised the government to continue its efforts in curbing volatility in the foreign exchange market and in renewing global interest in the Nigerian investment landscape to attract foreign capital.
In a related note, when questioned about cryptocurrency investments, Wilson-Diamond clarified that CFG Africa does not engage in such ventures. Instead, the organization focuses on alternative investment avenues such as trading in the US stock market, oil, and gold.
The consensus from the forum is clear: while recent reforms are showing promise, the path to sustainable economic transformation requires a deliberate reduction in the cost of borrowing and an unwavering commitment to consistent economic policies.
