E-Financial
CBN’s 303rd MPC Meeting: A Technocratic Victory, an Economic Setback, and a Missed Opportunity on Nigeria’s Real Crisis
By Blaise Udunze
The Central Bank of Nigeria (CBN) 303rd Monetary Policy Committee (MPC) meeting arrived at a time of unprecedented tension within the Nigerian economy. The country has not faced a more difficult convergence of challenges for more than a decade in the area of crushing food inflation, unrelenting insecurity, slowing growth, weak purchasing power, a fragile exchange rate, and rapidly eroding business confidence, as these are the current realities.
303rd MPC Meeting
Yet, against this troubling backdrop, the MPC chose to retain the Monetary Policy Rate (MPR) at 27 percent, kept the Cash Reserve Ratio (CRR) at a record-high 45 percent, held the Liquidity Ratio (LR) at 30 percent, and adjusted the asymmetric corridor, making it more reflective of technocratic cautions than economic realities
With the tense atmosphere, boldness, contextual sensitivity, and human-centric policymaking are required to douse the challenges. Instead, what Nigeria received was another round of technocratic orthodoxy, at a time when orthodoxy has clearly failed.
Why This MPC Meeting Matters More Than Any in Recent Memory
The importance of the 303rd MPC meeting cannot be overstated. It occurred at a time when:
– Nigeria’s food inflation remains structurally high, driven mainly by insecurity, not excess liquidity.
– Banditry, farmer-herder conflicts, kidnapping, and terrorism have made farming a high-risk activity across the North-East, North-West, North-Central, and increasingly the South, which has created an environment where fear, uncertainty, and instability have become the daily reality for millions of Nigerians.
– Growth has slowed, reflecting a tightening credit environment and collapsing consumer demand, while households spend 70-80 percent of income on food, according to industry surveys.
– Private-sector credit is shrinking, while government borrowing is expanding.
– The naira, though stabilising, remains vulnerable.
Given these realities, the MPC was expected to signal a shift, however modest, toward a more growth-supportive stance. Instead, it doubled down on tight policy.
Many analysts interpret this as a sign that the CBN is more committed to defending the naira and preserving the appearance of stability than responding to the lived experiences of citizens and businesses.
The CBN’s Insecurity Blind Spot: Food Prices Cannot Fall When Farmers Are Running for Their Lives
One of the biggest ironies in Nigeria today is the insistence by some policymakers that food prices are “declining” or that inflation is “moderating,” even as insecurity remains the biggest structural threat to price stability.
This contradiction reveals the central tension of Nigeria’s current economic moment; the macro indicators are improving, but the real economy, especially the food system, is collapsing under insecurity.
Recently, the United Nations World Food Programme (WFP) issued a stark warning that 35 million Nigerians are projected to face severe food insecurity by the 2026 lean season, which is the highest number ever recorded. Why? Because insurgent attacks are intensifying. Farmers are being killed or kidnapped. Entire communities are paying “harvest taxes” to armed groups.
Today, we witness farmers abandoning thousands of hectares of farmland. Irrigation systems, seeds, and inputs are inaccessible in conflict zones. This creates a vicious cycle as:
– insecurity reduces agricultural production,
– Reduced production pushes food prices up,
– Rising food prices fuel inflation,
– inflation erodes purchasing power,
– poverty deepens,
– insecurity worsens.
Yet the MPC communique did not mention this core driver of inflation in any meaningful way.
Instead, it continued to frame inflation as a monetary problem; something interest rates alone can fix. This is not only analytically flawed; it shows a more dangerous misdiagnosis that will prolong Nigeria’s food crisis.
The Hidden Question: Are Nigeria’s Inflation Numbers Truly Reliable?
A quiet but growing debate is emerging within the financial community about Nigeria’s inflation numbers and macroeconomic figures being massaged.
Dr. Tilewa Adebajo, CEO of CFG Advisory, put it bluntly, “Zero rate cut suggests the CBN MPC may not be totally confident in the NBS recent inflation numbers at 16 percent.”
This suspicion is not unfounded. Considering the recent realities facing the citizens, Nigerians are spending more on food than at any time in the last two generations. Staple prices such as rice, yams, garri, and beans are still high in almost every major market. Transport, rent, fuel, and electricity costs remain on the high side. Businesses report that operating expenses have not declined by any meaningful margin. Yet official inflation fell sharply to 16.05 percent.
It is mathematically difficult for headline inflation to fall significantly when food inflation, which is the most dominant component, continues to rise due to insecurity, logistics disruptions, and energy costs. This mismatch has forced many economists to ask: what exactly is being measured, and is the methodology still credible? For households already on the brink, numbers that suggest “improvement” feel not only inaccurate but insulting.
The Disconnect Between Governance and Lived Experience
This is where Nigeria’s economic narrative collapses, as the statistics may suggest progress, but households feel worse off than ever. This is why growing segments of society describe government optimism as tone-deaf.
A country cannot be “on the right path” when its citizens cannot afford rice, cannot fuel their generators, cannot pay transport fares, and cannot access credit to expand their businesses.
This disconnect exposes what many call the technocratic illusion, which is overly relying on models, spreadsheets, and monetary tenets in a country where insecurity, not excessive demand, is driving inflation. It reflects a divide between governance and reality, data and hunger, stability and survival.
Tight Monetary Policy: A Victory for Banks, a Defeat for the Real Economy
While the CBN insists that its tight stance is essential for price stability, analysts warn that the costs are becoming unbearable. Dr. Muda Yusuf argues that even a small rate cut of 25 to 50 basis points would have signaled a commitment to growth. Instead:
– Lending rates remain between 33 percent and 45 percent, suffocating SMEs.
– Credit to the private sector fell from N75.9 trillion to N72.5 trillion in just one month.
– Government borrowing is rising, crowding out real-sector lending.
– Manufacturers have cut production, citing financing conditions.
– Job creation is slowing, especially in youth-led sectors.
Banks, meanwhile, are reporting stronger margins and higher interest income. The question is no longer whether tight policy fights inflation. The question is whether Nigeria’s economy can survive its side effects.
The Naira: Stability Built on Fragile Foundations
The CBN’s main justification for maintaining the high MPR is to attract foreign portfolio investment (FPI), support the naira, and avoid destabilizing capital outflows. But this stability is fragile. FPIs are temporary “hot money.” They disappear at the slightest global shock.
Nigeria has suffered the consequences of relying on this route in 2014, 2018, 2020, and 2022. A sustainable naira requires:
– More domestic production
– Higher exports
– Better security
– Improved energy supply
– and a functional agricultural sector.
None of these received priority mention in the MPC deliberations.
The Real Test of Reform Is in People’s Lives, Not in Abuja’s Spreadsheets
Nigeria’s macroeconomic gains are being celebrated abroad. But hunger, joblessness, and despair are expanding at home. This is the irony of the current moment:
– Inflation is easing, yet hunger is rising.
– FX reserves are improving, yet insecurity is deepening.
– Subsidies are gone, yet the fiscal space they were meant to create is invisible.
– Reforms have stabilised numbers, but not people.
The World Bank’s October 2025 report warned that Nigeria’s progress means nothing if human welfare remains in decline. The success of reforms must now be measured not by GDP or FX reserves, but by how many Nigerians can afford to eat, work, and live with dignity.
A Missed Opportunity, Again
The 303rd MPC meeting should have been a turning point, a recognition that Nigeria’s inflation crisis is rooted in insecurity and supply shocks, not excess liquidity. Instead, the committee delivered technical caution, policy defensiveness, and an over-reliance on interest rate orthodoxy.
Nigeria needs a monetary policy that understands where the real crisis lies, in the abandoned farmlands, the unsafe highways, the displaced farming communities, and the markets where food prices rise weekly.
Without confronting this, Nigeria will continue to win macroeconomic battles while losing the war for human survival.
The Path Nigeria Must Chart to End Insecurity, Food Inflation, and Economic Stagnation
Nigeria’s 303rd MPC meeting made one thing clear that the country cannot escape its economic turmoil through monetary tightening alone. Interest rates cannot secure farms, rebuild supply chains, or put food on the table. What Nigeria needs now is a decisive, coordinated strategy that goes beyond the narrow lens of inflation targeting.
– First, security must become the cornerstone of price stability.
Food inflation will not recede until farmers can return to their lands without fear. A National Agro-Security Task Force merging military units, agro-rangers, police, intelligence agencies, and vetted community guards must secure farmlands and food corridors. Without safety in the agricultural belt, every other policy becomes cosmetic.
– Second, the CBN must adopt a dual mandate: price stability and growth.
Nigeria’s rigid monetary stance is suppressing credit, killing jobs, and suffocating production. Lowering the CRR to a realistic 25-30 percent and providing targeted single-digit loans to SMEs and manufacturers is essential for economic revival. Monetary policy must support growth, not stifle it.
– Third, Nigeria must rebuild trust in its economic data.
Doubts about inflation figures erode confidence. Modernizing NBS data-collection methods through digital analytics, satellite tools, and transparent audits is crucial. No country can chart a path out of crisis with unreliable statistics.
– Fourth, structural reforms must address cost-push inflation at its root.
Nigeria’s inflation is driven by high production costs despite poor roads, expensive power, weak logistics, and inefficient transport systems. Repairing agricultural roads, expanding rail freight, investing in cold-chain infrastructure, and boosting industrial power supply will reduce costs and unlock productivity.
– Fifth, the country must build an export-driven economy.
Stable exchange rates come from production, not high interest rates. Tax incentives for exporters, fully functional Special Economic Zones, and improvements in customs efficiency will help Nigeria attract stable capital and grow non-oil exports.
– Sixth, social protection must expand to shield vulnerable households.
Targeted food vouchers, transport subsidies, and school feeding programs are necessary to cushion families from economic shocks. Reform without social protection is a recipe for social unrest.
– Finally, Nigeria needs a whole-of-government Economic War Room.
Security agencies, economic ministries, the CBN, the NBS, and the private sector must collaborate in real time to track inflation drivers, coordinate responses, and prevent policy contradictions. Economic management must become proactive, not reactive.
Stability Must Translate to Human Welfare
The 303rd MPC meeting signaled caution, but what Nigeria needs is direction. It needs clarity, boldness, and policies rooted in the lived realities of millions. Monetary tightening has achieved what it can; the next phase requires confronting insecurity, energizing production, restoring data credibility, and building a growth-driven economy.
Nigeria cannot tighten its way out of this crisis. It must reform, secure, produce, and most importantly, protect its people. If not, the nation will continue to win statistical battles while losing the war for human survival.
Blaise, a journalist and PR professional, writes from Lagos, can be reached via: [email protected]
The Senate yesterday recorded two major milestones in Nigeria’s financial sector, passing a landmark Insurance Regulatory Commission Bill to replace the nearly three-decade-old National Insurance Commission (NAICOM) Act of 1997.
Also in a separate development, the Committee on Banking Insurance and other Financial Institutions, overwhelmingly cleared former Director-General of the Securities and Exchange Commission (SEC) and current Deputy Governor of the Central Bank of Nigeria (CBN), Mr. Lamido Yuguda, for appointment as Chairman of the Board of the Asset Management Corporation of Nigeria (AMCON).
The insurance reform legislation, described by lawmakers as one of the most comprehensive overhauls of Nigeria’s insurance regulatory framework in decades, seeks to modernise regulation, strengthen consumer protection, enhance financial stability and align the nation’s insurance industry with global best practices.
The bill, passed during plenary presided over by the President of the Senate, Senator Godswill Akpabio, followed the adoption of the report of the Senate Committee on Banking, Insurance and Other Financial Institutions chaired by Senator Mukhail Adetokunbo Abiru (APC, Lagos East).
The legislation repeals the National Insurance Commission Act, 1997 and establishes a new Insurance Regulatory Commission with broader supervisory and enforcement powers designed to respond more effectively to the changing dynamics of the insurance industry.
Presenting the committee’s report, Abiru told senators that the existing legal framework had become grossly inadequate for regulating a rapidly evolving insurance sector.
He said: “The current National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the insurance business.”
According to him, although NAICOM had made significant contributions to regulating insurance companies, brokers and loss adjusters while protecting policyholders and enforcing industry standards, its enabling law had failed to keep pace with international developments.
Abiru explained: “Despite its significant contributions, the enabling law has become obsolete, failing to align with current realities and global best practices, and unable to keep pace with the evolving nature of the insurance industry, exposing numerous gaps in the law, necessitating urgent amendments.”
He disclosed that the proposed law guarantees the independence of the Insurance Regulatory Commission while substantially expanding its powers to supervise operators and safeguard the stability of the financial system.
According to him, the commission would have authority to issue regulations, standards, guidelines and directives, collaborate with domestic and international regulatory institutions, exchange supervisory information and intervene promptly in troubled insurance companies before their problems escalate.
He stressed that the strengthened intervention powers would remove bureaucratic bottlenecks that had previously delayed regulatory actions against distressed insurance firms.
Abiru said the legislation also introduces stricter corporate governance requirements by prescribing higher qualifications for members of the commission’s governing board.
He explained that only individuals with proven competence in insurance, finance, law, risk management and corporate governance would qualify for appointment, thereby ensuring more professional oversight of the industry.
The committee chairman further revealed that the bill significantly strengthens enforcement mechanisms by imposing stiffer sanctions on erring operators.
According to him, the law provides for heavier financial penalties, suspension of operating licences, additional liabilities for defaulting operators and disqualification of persons responsible for the collapse or regulatory failure of insurance institutions from occupying positions within the industry.
Abiru also noted that the legislation broadens the commission’s mandate beyond regulation to include the effective administration, supervision, control, integrity and overall development of insurance business in Nigeria.
He said the proposed change of name from the National Insurance Commission to the Insurance Regulatory Commission would eliminate longstanding confusion about the agency’s role and better reflect its statutory responsibility as the country’s insurance regulator.
Giving insight into the legislative process, Abiru disclosed that the committee subjected the bill to rigorous scrutiny, including a public hearing held on November 12, 2025.
He said more than 50 memoranda and several oral submissions were received from critical stakeholders, including the Federal Ministry of Finance, CBN, Nigeria Deposit Insurance Corporation, SEC, Federal Mortgage Bank of Nigeria, Nigerian Insurers Association, Nigerian Council of Registered Insurance Brokers and the Chartered Insurance Institute of Nigeria. Africans& Diaspora
According to him, the overwhelming consensus among stakeholders was that urgent reforms had become inevitable.
Abiru said: “The inputs made on the proposed bill will go a long way in providing a comprehensive legal framework for the regulation and supervision of all manner of insurance businesses in Nigeria to ensure that the industry is able to successfully compete on a global level and improve international competitiveness of Nigeria’s insurance industry.”
After considering the bill clause-by-clause in the Committee of the Whole, the Senate unanimously passed it for third reading.
Akpabio commended Abiru and members of the committee for championing what he described as a far-reaching reform capable of transforming Nigeria’s insurance industry.
He assured the committee that the National Assembly would continue to enact laws that would strengthen the country’s financial services sector, improve transparency and promote international competitiveness.
The bill will now proceed to the House of Representatives for concurrence before being transmitted to President Bola Tinubu for presidential assent.
After the plenary on Tuesday, the Senate Committee on Banking, Insurance and Other Financial Institutions overwhelmingly cleared Yuguda as Chairman of the Board of AMCON after granting him the rare privilege of a “take a bow and go” screening.
The committee dispensed with the conventional screening process on the grounds that Yuguda had previously appeared before the Senate for confirmation into several strategic public offices and had consistently demonstrated exceptional competence.
Presenting the nomination, the Special Adviser to the President on National Assembly Matters (Senate), Senator Basheer Lado, reminded lawmakers that Yuguda had undergone rigorous screening in the past.
He explained that the latest appearance was simply to comply with the provisions of Section 10(1)(a) of the AMCON Establishment Act, 2019, as amended. Abiru described Yuguda as one of the most trusted public officials appointed by President Tinubu.
He told committee members: “As all of us may recall, the appointee, Mr. Lamido Yuguda, whose résumé is before every member, has appeared before this committee on previous occasions.”
He added: “More recently, he also appeared before us for screening as Deputy Governor of the Central Bank of Nigeria.”
In a light-hearted remark that drew laughter from members, Abiru observed: “If you ask me, I think he is probably the luckiest person in this administration, having been appointed by the same president on three different occasions for three different responsibilities.
“I am sure you will agree with me that he is more than qualified for the role he is about to assume.”
Former Senate Chief Whip, Senator Orji Uzor Kalu, immediately moved the motion for Yuguda to “take a bow and go”.
Kalu said: “President Tinubu has, on three occasions, appointed the same man to important national assignments. I therefore move that Mr. Lamido Yuguda be allowed to take a bow and go.”
The motion was seconded by the committee’s Acting Vice-Chairman, Senator Mohammed Sani Musa, who described the nominee as eminently qualified.
Musa said: “Looking at the résumé of the nominee and considering that Mr. President has repeatedly found him worthy of appointment to critical national offices, there is no doubt that he is eminently qualified.” ExecutiveBranch
The committee unanimously adopted the motion through a voice vote, after which Abiru formally declared Yuguda cleared.
The committee, however, quickly shifted attention to AMCON’s future, with Musa calling for a comprehensive briefing on the corporation’s performance as it approaches its statutory wind-up date in 2030.
He reminded the management that AMCON was established to resolve non-performing loans, distressed banks and systemic financial risks, stressing that lawmakers needed a comprehensive assessment of its achievements and pending obligations.
Musa said: “It has a statutory lifespan and is expected to wind up around 2030. Looking at that timeline, there is a need for this committee to receive an up-to-date report on the status of AMCON.
“We need to know where the corporation stands today, what it has achieved since inception and what outstanding responsibilities remain before its expected sunset.”
Responding, Abiru assured the committee that the requested briefing would be provided.
He said: “I am sure the leadership of AMCON understands the point you have raised, and it is well noted.
“I have no doubt that, in the not-too-distant future, the committee will receive a comprehensive response on the issues you have highlighted.” The recommendation confirming Yuguda’s appointment is expected to be presented before the Senate in plenary for final approval.
E-Financial
CBN Retains Interest Rate at 26.5% as Cardoso Cites Global Uncertainty Despite Inflation Drop
Central Bank of Nigeria (CBN) has retained the Monetary Policy Rate (MPR), the nation’s benchmark interest rate, at 26.5 per cent, citing heightened global uncertainties despite signs of resilience in the domestic economy.
The CBN Governor, Mr Olayemi Cardoso, announced the decision on Tuesday after the conclusion of the 306th meeting of the Monetary Policy Committee (MPC) held in Abuja from July 20 to July 21.
Cardoso said the committee resolved to maintain the current monetary policy stance after reviewing domestic and international economic developments.
“The Committee decided to retain the Monetary Policy Rate at 26.5 per cent,” he said.
The governor said renewed geopolitical tensions, particularly in the Middle East, continued to pose risks to global energy prices and inflation, necessitating a cautious approach.
He said the committee also retained the Standing Facilities Corridor at +50/-450 basis points around the MPR.
The Cash Reserve Ratio (CRR) was also left unchanged at 45 per cent for Deposit Money Banks, 16 per cent for merchant banks and 75 per cent for non-Treasury Single Account public sector deposits.
According to Cardoso, the MPC’s decision followed an assessment of the balance of risks confronting the economy.
“Although headline inflation moderated marginally in June 2026, global uncertainties have intensified, largely due to renewed hostilities in the Middle East,” he said.
He added that despite the challenging global environment, Nigeria’s economy had remained resilient, supported by ongoing structural reforms.
The governor noted that the committee would continue to monitor economic developments and adjust policy measures when necessary to maintain price stability.
The latest decision represents the second time in 2026 that the MPC has maintained the benchmark interest rate at 26.5 per cent.
The announcement came shortly after the National Bureau of Statistics (NBS) reported that Nigeria’s headline inflation rate eased slightly to 15.91 per cent in June 2026 from 15.93 per cent recorded in May.
National Insurance Commission (NAICOM) has declared that it has no plans to extend the 31 July 2026, deadline for the ongoing insurance industry recapitalisation exercise, asserting that the date is firmly rooted in the new Insurance Act.
Speaking at the investiture of Mr Akinjide Oluwarotimi-Orimolade as the 53rd president of the Chartered Insurance Institute of Nigeria (CIIN) in Lagos, Olusegun Omosehin, commissioner for Insurance, emphasised that the exercise remained central to building a resilient market.
With less than two weeks left before the window closes, the regulator commended operators making steady progress but stressed that the timeline must be treated with absolute urgency.
Omosehin said, “A stronger capital base must translate into stronger service delivery, prompt claims settlement, improved consumer protection, and a market that Nigerians can trust.
“The industry’s future will be determined by the quality of leadership, depth of competence, and discipline in serving the public interest.”
The ongoing exercise follows the historic signing of the Nigeria Insurance Industry Reform Act by President Bola Tinubu, which effectively repealed the outdated 2003 Insurance Act. Under the new framework, the sector is transitioning from a static baseline model to a dynamic risk-based capital structure. This regulatory shift aims to fortify operators against systemic economic shocks and better position the industry to contribute significantly to the Federal Government’s target of a $1tn economy.
Consequently, the exercise requires a massive capital lift across the board, pushing life underwriters from N2bn to N10bn, non-life operators from N3bn to N15bn, and reinsurers from N10bn to N35bn.
The push comes amid strong legislative alignment, with the National Assembly pledging its full backing to ensure these reforms translate into deeper market penetration.
Also speaking at the event, Ahmadu Jaha, chairman of the House of Representatives Committee on Insurance and Actuarial Matters, reaffirmed the parliament’s dedication to providing the necessary legal frameworks to drive sector growth.
Jaha said, “As Chairman of the House Committee on Insurance and Actuarial Matters, I wish to reaffirm the unwavering commitment of the House of Representatives to supporting legislative initiatives that will strengthen the insurance industry, improve regulatory effectiveness, enhance consumer protection and promote wider insurance penetration across Nigeria.
“The National Assembly recognises the critical role of the insurance industry in mobilising long-term capital, financing infrastructure development, protecting businesses and households against unforeseen risks, promoting financial stability and driving sustainable economic growth.”
Responding to the charge, the newly inaugurated Orimolade, president, CIIN, stated that his administration would aggressively protect the public interest by advancing the core mandates of the institute.
Orimolade promised “to build on the programmes of my predecessors while evolving new ideas that can further increase insurance education, awareness and acceptance across the country.”
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