Nigeria’s monetary policy should not be viewed as a choice between attracting foreign portfolio investors and supporting local businesses, PwC’s Director of Deals Advisory, Wale Olusi, has said.
Olusi said the Central Bank of Nigeria’s priority remained macroeconomic stability rather than attracting foreign portfolio investments.
He spoke while explaining the CBN’s decision to keep interest rates high despite the pressure facing businesses.
“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.
High Interest Rates Keep Borrowing Costs Up
The CBN has kept its Monetary Policy Rate at 26.5 per cent since cutting it by 50 basis points in February.
The decision comes as inflation continues to moderate.
However, the tight monetary policy has kept borrowing costs high for businesses.
Manufacturers currently face lending rates of between 25 per cent and 35 per cent.
High domestic interest rates have also made Nigerian fixed-income assets more attractive to foreign portfolio investors.
PwC data showed that foreign portfolio investors accounted for almost all of Nigeria’s $10.37 billion capital inflows in the first quarter of 2026.
Rate Cuts Could Come Later
Olusi said the CBN was not keeping rates high simply to attract foreign investors.
He also said the bank was not focused on cutting 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.
Olusi added that the CBN could consider further rate cuts 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,” he said.
CBN Should Focus on Core Mandate
Emerging markets expert Ike Ibeabuchi said there was no real conflict between monetary stability and attracting investors.
He said investors would naturally enter the market when the CBN maintains price and currency stability.
“The role of the CBN is to maintain price stability, set monetary policy, and manage the naira and FX market to achieve stability,” Ibeabuchi said.
“Once you do all these, investors will come. It is not rocket science.”
He said central bank governors do not normally design monetary policies specifically to attract portfolio investors.
“Maybe that can happen on the fiscal side,” he added.
“But it is difficult for you to target portfolio investors or other types of investors without doing the basic jobs of the central bank.”
