A majority of Nigerians want lower borrowing costs as the country’s central bank prepares for a key policy meeting, a new survey has shown, highlighting growing pressure on policymakers to balance stubborn inflation against weakening household finances.
According to the January 2026 Household Expectations Survey released by the Central Bank of Nigeria (CBN), about 65 percent of respondents favour a reduction in lending rates, even as concerns about rising prices remain widespread.
The findings come ahead of the Monetary Policy Committee (MPC) meeting scheduled for February 23–24, where officials will decide whether to maintain Nigeria’s benchmark interest rate at a record-high 27 percent or begin cautiously easing monetary conditions.
The MPC last held the Monetary Policy Rate (MPR) at 27.0 percent in November 2025, following a modest 50-basis-point cut in September. The decision reflected continued caution over inflation risks, despite signs of economic strain.
The survey shows that while most Nigerians want cheaper credit, opinions are divided on how to manage inflation. About 50.1 percent of respondents said they would prefer interest rates to remain low even if inflation accelerates, while 41.8 percent favoured higher rates to curb price pressures. Another 8.2 percent expressed no clear view.
“Majority of respondents prefer lower interest rates, with 65.0 percent indicating a desire for rates to decline,” the CBN said in the report.
Nigeria has faced persistent inflationary pressures driven by currency weakness, higher energy costs following fuel subsidy reforms, and food supply disruptions. Although inflation has shown tentative signs of easing in recent months, prices remain elevated, eroding purchasing power and squeezing household budgets.
Reflecting these concerns, about 66.6 percent of respondents said the economy would weaken if prices rose faster than current levels. Only 9.6 percent believed faster inflation would strengthen the economy, while 20 percent said it would make little difference.
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Despite these anxieties, consumer sentiment remained positive for a third straight month in January, though at a slower pace. The Overall Consumer Sentiment Index eased to 2.8 points from 4.8 points in December 2025, suggesting cautious optimism.
Lagos, Nigeria, West Africa
Sub-indices painted a mixed picture. The Economic Condition Index stood at 7.4 points, indicating confidence in broader economic prospects, while the Family Income Sentiment Index rose to 9.1 points. In contrast, the Family Financial Situation Index remained negative at minus 8.2 points, underscoring ongoing stress on household finances.
Spending patterns suggest Nigerians continue to prioritise essentials. Food and household items recorded the highest expenditure outlook for the current month at 62.7 index points, with education and transportation following behind. Food spending is expected to remain elevated over the next six months, reflecting both necessity and lingering price pressures.
Demand for big-ticket items, however, remains subdued. The Buying Intention Index for high-value purchases stayed well below the 50-point threshold that signals balance between buyers and non-buyers, pointing to continued caution in discretionary spending.
The survey results underline the policy dilemma facing the MPC under CBN Governor Olayemi Cardoso. While aggressive tightening has helped stabilise financial markets and support the naira, it has also pushed lending rates to levels many households and businesses find prohibitive.
Internal divisions within the MPC have already emerged. In November, five of the committee’s 12 members voted for a further 50-basis-point cut, citing sustained disinflation, stronger external buffers and improving growth conditions. The majority, however, opted to hold rates steady, emphasising the need to guard against renewed inflationary shocks.
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As the February meeting approaches, analysts say the latest survey adds to pressure on the central bank to consider easing, though most expect policymakers to move cautiously.
“With inflation still high and expectations fragile, the central bank is likely to prioritise stability,” one Abuja-based economist said. “But the message from households is clear: access to affordable credit is becoming a pressing concern.”
The MPC’s decision later this month will be closely watched by investors, businesses and consumers alike, as Nigeria seeks a path toward growth without reigniting inflation.
Nigeria’s debate over interest rates comes as households and businesses grapple with tight financial conditions following aggressive monetary tightening by the Central Bank of Nigeria. Since 2023, the CBN has raised rates sharply to curb inflation driven by currency depreciation, fuel subsidy removal and food supply shocks. The benchmark Monetary Policy Rate now stands at 27%, one of the highest in Nigeria’s history, significantly increasing borrowing costs for consumers and firms.
As the Monetary Policy Committee prepares for its next meeting under the leadership of Olayemi Cardoso, policymakers face a delicate trade-off. While inflation remains elevated and a key concern, slowing growth, pressure on household incomes and weak credit demand are intensifying calls for easing. The latest Household Expectations Survey highlights this tension, showing Nigerians increasingly prioritising access to cheaper credit and short-term economic relief, even as inflation risks persist, setting the stage for a closely watched MPC decision.
