Despite successive reductions in the Monetary Policy Rate (MPR) by the Central Bank of Nigeria (CBN), commercial banks have increased average prime lending rates across several key sectors of the economy, raising concerns over the cost of borrowing for businesses.

The CBN, in September 2025, announced its first reduction in the MPR from 27.5 per cent to 27 per cent. This was followed by a 50-basis-point cut to 26.5 per cent in February 2026 and a further 350-basis-point reduction to 23 per cent in September 2026.

The latest reduction followed a sustained decline in inflation, which dropped from 15.93 per cent in May 2026 to 15.39 per cent in August and further to 14.63 per cent in September.

The cumulative 450-basis-point reduction in the benchmark interest rate over 13 months had raised expectations that banks would lower their lending rates, providing relief for businesses and households.

However, findings by Financial Vanguard from the CBN’s published interest rate schedules for August 2025 and October 2026 show that average prime lending rates increased in eight of the 11 key economic sectors.

The affected sectors include agriculture, forestry and fishing; construction; government; human health and social work; real estate; manufacturing; education; and finance and insurance.

The increases ranged from 0.33 percentage points in finance and insurance to 1.33 percentage points in agriculture, forestry and fishing.

In agriculture, forestry and fishing, the average prime lending rate rose to 24.77 per cent from 23.44 per cent, while construction increased to 26.40 per cent from 25.25 per cent.

Similarly, lending rates to the government climbed to 26.49 per cent from 25.52 per cent, while the rate for human health and social work rose to 26.96 per cent from 26.11 per cent.