Inflation: NECA Seeks Strategic Monetary Policy Easing to Unlock Growth

By Modupe Gbadeyanka

The cooling of the country’s inflation for the fifth consecutive month to 20.12 per cent in August 2025 has been applauded by the Nigeria Employers’ Consultative Association (NECA).

On Monday, the National Bureau of Statistics (NBS) said the rate at which the prices of goods and services increased was 20.12 per cent last month compared with 21.88 per cent in July 2025.

This development excited NECA, which said this sustained progress presents a crucial opportunity for policymakers, particularly the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), to re-evaluate its prolonged tight monetary policy stance.

The MPC meeting is expected to commence next Monday, with the CBN Governor, Mr Yemi Cardoso, to announce outcome of deliberations the next day.

There have been calls for the committee to cut rates, especially the Monetary Policy Rate (MPR), after leaving them intact for the fourth time at its last gathering in July 2025.

In a statement made available to Business Post on Wednesday, the Director-General of NECA, Mr Adewale-Smatt Oyerinde, said while the decline in inflation is commendable, its full benefits would remain muted unless the MPC strategically begins to reduce the benchmark interest rate.

“Lower interest rates will not only stimulate enterprise competitiveness but also boost access to credit, investment, and job creation, which are critical levers for inclusive growth,” Mr Oyerinde was quoted as saying.

He, however, expressed concern that despite a marginal decline, food inflation remains high at 21.87 per cent, continuing to exert immense pressure on households, stressing that, “For Nigerians to truly feel the impact of macroeconomic improvements, the decline in staple prices must translate into real relief for families.”

Mr Oyerinde highlighted that for businesses, high operating costs—driven by raw materials, energy, and logistics—remain a threat to sustainability. For individuals, persistent inflation continues to erode disposable income and consumer demand, undermining growth and hindering meaningful job creation.

The DG advised that the government must complement monetary easing with broader interventions. These include further strengthening the exchange rate to curb imported inflation, investing heavily in agriculture by securing farming communities and expanding mechanization, and addressing structural bottlenecks in energy, transport, and regulation.

He concluded by emphasizing that the current inflation trend presents a compelling case for the MPC to ease its tight stance.

“It is time to balance price stability with deliberate growth stimulation so that enterprises can thrive, jobs can be created, and Nigerians can experience tangible relief from the cost-of-living crisis,” the NECA chief declared.