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.
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.