The Capital Market Academics of Nigeria (CMAN) has commended the Central Bank of Nigeria (CBN) for recent monetary policy reforms while urging the apex bank to adopt a gradual approach to lowering interest rates as inflation expectations improve.
Speaking at a press conference in Abuja ahead of the association’s second biennial conference, CMAN President, Prof. Uche Uwaleke, said any easing of the current tight monetary stance should be measured and supported by fiscal policies aimed at addressing structural drivers of inflation.
According to him, while high interest rates have helped moderate aggregate demand, they have also increased borrowing costs, discouraged private investment and constrained business expansion.
Uwaleke argued that as inflation becomes increasingly driven by structural and cost-push factors, monetary policy should rely less on repeated increases in the Monetary Policy Rate (MPR) as the primary tool for curbing price pressures.
He also praised the CBN for implementing reforms aimed at restoring confidence in the financial system, particularly the clearance of more than $7 billion in outstanding foreign exchange obligations inherited from previous administrations.
Beyond monetary policy, CMAN expressed concern over the Federal Government’s borrowing strategy, noting that about 80 per cent of domestic debt is raised through conventional Federal Government of Nigeria bonds, with much of the borrowing not directly linked to identifiable development projects.
To improve transparency and strengthen investor confidence, the association called for increased issuance of project-specific financing instruments, including Sukuk bonds, green bonds and other thematic infrastructure securities.
According to Uwaleke, linking borrowings to clearly defined infrastructure projects would improve accountability while ensuring that debt financing delivers measurable economic and social benefits.
The association also advised state governments to rely more on the capital market for long-term infrastructure financing instead of depending heavily on short-term commercial bank loans.
Uwaleke warned that financing long-term projects with short-term debt creates refinancing risks and places additional pressure on state finances.
He said a deeper and more efficient capital market would provide a sustainable source of funding for infrastructure, lower the cost of doing business, stimulate investment and improve productivity across the economy.
“The capital market offers a more sustainable financing framework for infrastructure that can ultimately improve productivity, reduce business costs and ensure that macroeconomic gains translate into meaningful improvements in the daily lives of Nigerians,” he said.
Uwaleke added that Nigeria’s capital market has the capacity to mobilise domestic savings, finance infrastructure, support entrepreneurship, attract long-term investment and drive inclusive economic growth.
He, however, stressed that unlocking the market’s full potential would require stronger collaboration among government, regulators, financial institutions, market operators, investors and the academic community.
The theme of CMAN’s second biennial conference is “The Nigerian Capital Market as a Catalyst for Equitable and Inclusive Growth.”