CBN’s priority is macro stability, not portfolio investment — Analysts

Nigeria’s monetary policy should not be viewed as a choice between attracting foreign portfolio investments and supporting local businesses, as the Central Bank of Nigeria’s primary responsibility is to maintain macroeconomic stability, according to Director of Deals Advisory at PwC, Wale Olusi.

Olusi said the CBN’s decision to keep interest rates elevated was driven by its efforts to stabilise inflation and the broader economy, rather than a deliberate attempt to attract foreign portfolio investments.

“That is the job of the central bank. They target job  stabilisation of the macroeconomy, which they have achieved,” Olusi said.

“Initially, people were searching for dollars, but the CBN has stabilised the FX market. It has now reduced inflation,” he added.

The CBN has maintained its Monetary Policy Rate at 26.5 per cent since cutting it by 50 basis points in February, even as inflation has continued to moderate.

The tight monetary stance has, however, kept borrowing costs high for businesses, with manufacturers facing lending rates of between 25 per cent and 35 per cent.

At the same time, high domestic interest rates have increased the attractiveness of Nigerian fixed-income assets to foreign portfolio investors.

PwC data showed that foreign portfolio investors accounted for almost all of Nigeria’s $10.37bn capital inflows in the first quarter of 2026.

Olusi said the CBN’s focus was neither on attracting portfolio investors nor on cutting interest rates simply to make borrowing cheaper.

“When the current administration came to power, people were complaining about inflation. What they have done is to reduce inflation and achieve macroeconomic stability,” he said.

He added that further rate cuts could become possible once inflation is sufficiently contained.

“Maybe when the inflation is reduced, CBN can decide to cut rates. But for now, the interest is neither to attract portfolio investments nor cut rates,” Olusi said.

An emerging markets expert, Ike Ibeabuchi, explained that though monetary policy administrators appear to be facing dilemma, there is really no such thing.

“The role of the CBN is to maintain price stability, set monetary policy, and manage the naira and FX market to achieve stability. Once you do all these, investors will come. It is not rocket science.

“So, you will not find any central bank governor targeting portfolio investors only with policies. Maybe that can happen on the fiscal side. But it is difficult for you to target portfolio investors or other types of investors without doing the basic jobs of the central bank.”