CardinalStone Projects 300–400bps MPR Reduction in 2026

Investment banking firm CardinalStone has projected a possible reduction of between 300 and 400 basis points in Nigeria’s Monetary Policy Rate (MPR) in 2026, citing improving macroeconomic stability and easing financial pressures across the economy.

The projection is contained in CardinalStone Partners’ 2026 economic outlook report titled “Indicators Align for Sustained Macro Gains.” According to the firm, the expected shift in monetary policy could significantly improve credit availability, reduce borrowing costs, and support higher output levels, particularly in the manufacturing sector.

The report noted that sustained macroeconomic stability, combined with lower interest rates, would ease access to credit and encourage manufacturers to scale operations. It added that improvements in domestic refining capacity expected in 2026 would further support industrial activity by reducing energy-related constraints and input costs.

CardinalStone explained that high interest rates have weighed heavily on manufacturers in recent years, limiting working capital access and discouraging capacity expansion. A lower policy rate, it said, would ease these pressures and improve overall sector performance.

Beyond manufacturing, the firm expressed optimism about growth prospects in financial services. It projected sector growth of 20.3 per cent in 2026, up from an estimated 17.6 per cent in 2025, driven largely by higher fee-based income.

According to the report, credit-related charges, which currently form the largest share of banks’ non-interest income, are expected to rise as cheaper borrowing stimulates loan demand and broader credit creation. Stable macroeconomic conditions and non-performing loan ratios remaining within regulatory limits are also expected to support healthier credit expansion.

Electronic banking fees were also identified as a key growth driver, reflecting continued investments by banks in digital platforms, fintech partnerships, and expanded payment channels.