High Interest Rates Could Stifle Growth, Warns House Committee

The House of Representatives has warned the Central Bank of Nigeria, CBN, about the potential consequences of maintaining high interest rates.

The warning comes ahead of the CBN’s 300th Monetary Policy Committee meeting next week.

Chairman House Committee on National Planning and Economic Development, Gboyega Nasiru issued the warning during a meeting with the Statistician-General of the Federation and Chief Executive Officer of the National Bureau of Statistics, Mr Adeyemi Adeniran.

Nasiru said the current interest rate of 27.5% could stifle growth and employment in key sectors such as manufacturing and agriculture and urged the CBN to consider a more accommodative stance to support economic growth.

“The CBN has raised interest rates 10 times since January 2023 in an effort to curb inflation.

However, critics argue that this approach may be harming the economy’s growth potential.

In his remarks, Adeniran noted that the latest data released by the Bureau, covering the second quarter of 2024, reported an unemployment rate of 4.3 per cent—down from 5.3 per cent in the previous quarter.

He added that unemployment was more prevalent among females (5.1 per cent) than males (3.4 per cent), and higher in urban areas (5.2 per cent) compared to rural areas (2.8 per cent).

Adeniran further stated that young people face a relatively higher unemployment rate of 6.5 per cent, while 12.5 per cent of youths are not in employment, education, or training (NEET). The NEET rate was higher among young females (14.3 per cent) compared to young males (10.9 per cent).

The Statistician-General also disclosed that the Q3 and Q4 2024 reports are currently being finalised and will soon be released to the public.

Oduyemi Odumade, Edited By Grace Namiji