The Lagos Chamber of Commerce and Industry (LCCI) has forecasted a potential reduction in interest rates in the coming months, as inflation begins to show signs of easing.
Speaking at a press briefing for the chamber’s 2025 outlook on Thursday in Lagos, LCCI President Gabriel Idahosa indicated that the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) is likely to adopt an easing stance soon. “While we project that the MPC may begin to ease interest rates within the next few months, driven by a likely reduction in inflation, we caution the government not to shift its focus away from tackling inflationary pressures,” Idahosa said.
The LCCI expressed concern over the impact of high interest rates on the private sector, which it views as the backbone of Nigeria’s economy. The current 27.5% monetary policy rate, according to the LCCI, has led to higher borrowing costs, reduced investment, and diverted funds to government treasuries.
“Rate hikes alone will not curb inflation unless the challenges in the real sector are addressed,” Idahosa stressed, calling on the government to support agriculture and manufacturing as part of its strategy to tackle inflation.
On inflation, which reached a near 30-year high of 34.8% in December 2024, Idahosa pointed to factors such as insecurity, transportation costs, and climate change as major contributors. Nevertheless, he remained hopeful about the potential impact of ongoing policy reforms. “If the government aligns its fiscal and monetary policies to reduce agricultural production costs and address insecurity, inflationary pressures could ease,” he said.
The Chamber also criticized the country’s floating exchange rate system, citing the naira’s 40.9% depreciation against the dollar in 2024. Idahosa attributed this decline to speculative activities and a mismatch between foreign exchange supply and demand. He urged the government to increase forex inflows and promote market transparency to stabilize the naira.
While praising the 2025 ‘Budget of Restoration,’ the LCCI called for strong implementation to meet its ambitious targets. Idahosa emphasized that the N34.82 trillion revenue projection highlights the need for comprehensive tax reforms, greater digital transparency, and the inclusion of the informal sector in the tax system.
