By Ajibola Olarinoye
The Central Bank of Nigeria’s bigwigs (the Monetary Policy Committee) got together on Tuesday and decided, “ let’s give the country a little breathing room.” They actually dropped the interest rate from a sky-high 27.5% to a slightly less ridiculous 27%. Yeah, I know, not earth-shattering, but still—baby steps.
CBN’s head , Olayemi Cardoso, came out after their marathon meeting in Abuja and spilled the tea. Apparently, everyone on the committee was surprisingly on the same page for once. The reason? Inflation’s finally stopped acting like it’s on steroids and has been chilling out for five months straight. Miracles do happen.
Not just that, they also messed around with the Cash Reserve Ratio—now it’s 45% for regular banks and 16% for merchant banks. I mean, don’t ask me why the difference, bankers love their little secrets. Oh, and they tweaked the “asymmetric corridor” (fancy talk for the wiggle room banks have around the policy rate) to plus or minus 250 basis points. Sounds like a math headache, honestly.
And, fun fact: this is the first time since May 2023 that they’ve actually cut rates. Before that, they went from 18% down to 17.5%. Slow and steady, I guess.
Why now? Manufacturers and basically anyone who actually makes stuff in Nigeria have been begging for lower rates so they don’t have to sell a kidney to cover production costs. The latest inflation numbers—down to 21.12% in August for the fifth month running—probably gave the committee the nudge they needed.
Zooming out, Nigeria’s economy actually grew by 4.23% in Q2 of 2025 (yeah, you read that right), up from 3.13% the previous quarter. Not too shabby. Agriculture, services, industry, and oil are all flexing, but sectors like manufacturing, trade, ICT, and car assembly? Ehh, not so much. Bit of a mixed bag.
And here’s the kicker—compared to other African heavyweights like Ghana and South Africa, Nigeria’s still got way higher interest rates and inflation.
