CBN interest rates and what they mean for you
How the CBN's monetary policy, Treasury bill and lending rates feed into a Nigerian business's loan costs, idle cash and late-tax interest.
By Achekam · · 5 min read · For Running a business businesses in Nigeria
Most owners of Nigerian businesses hear about the Central Bank of Nigeria's rates on the evening news, after a Monetary Policy Committee meeting, and file them under "economy, not my problem". Then the bank sends a revised loan offer, or a tax penalty notice arrives with an interest line on it, and the rate turns out to be very much their problem.
The CBN publishes a small table of money market figures that touches a business in three places: what borrowing costs, what spare cash could earn, and what a late tax payment costs. This article explains each figure in plain terms, quotes them as they stood at the time of writing, and shows how to carry them into your own budget.
One table, updated monthly
The CBN's Money Market Indicators table lists, month by month, a short set of rates in percent: the inter-bank call rate, the minimum rediscount rate, the Monetary Policy Rate (MPR), the Treasury bill rate, and the prime and maximum lending rates. You can read the current figures on the CBN's money market indicators page, which publishes the MPR, the lending rates and the Treasury bill rate together.
When this article was written, August 2026 was the latest month shown. The table changes every month, so treat every figure below as a snapshot and check the page before you rely on one.
The MPR: the yardstick for tax interest
The MPR is the CBN's headline policy rate. In August 2026 it stood at 26.50 percent, unchanged from July and June 2026. (The inter-bank call rate, the row above it, was 22.00 for August.)
The MPR matters to a business for a reason that has nothing to do with loans: Nigerian tax law uses it to price lateness.
- Withholding tax not remitted. Under the Nigeria Tax Administration Act, 2025, a person who deducts or withholds tax and fails to remit it by the 21st day of the month after the deduction is liable for the amount not remitted, an administrative penalty of 10% per annum of that amount, and interest at the prevailing CBN monetary policy rate.
- Supplies not fiscalised. The NRS says a taxable person who fails to process a taxable supply through the fiscalisation system is liable to an administrative penalty of 200,000, plus 100 percent of the tax due, plus interest at the prevailing MPR per annum.
- Late payment generally. Late payment of tax attracts a 10% penalty plus interest, and that interest runs at the CBN's monetary policy rate plus a spread.
A worked example in words. A trading company withholds tax from a contractor's invoice in one month and forgets to send it to the NRS. Three months later the bookkeeper notices. The company now owes the tax itself, the 10% a year penalty for the time it was late, and interest at whatever the MPR was over that period. With the MPR at the level it reached in 2026, the interest line alone can be uncomfortable. The penalty articles for late returns and for withholding tax remittance go further into each charge.
The cheapest way to manage MPR-linked interest is not to incur it: remit on time and file on time.
Prime and maximum lending rates when you borrow
The two lending rows describe what banks charge. In August 2026 the CBN's table gave a prime lending rate of 17.86 percent and a maximum lending rate of 29.20 percent, down from 19.06 percent and 33.16 percent in July 2026.
The prime rate is roughly what a bank's strongest borrowers pay. The maximum rate is the top of the range. A small business with a short trading record, thin security or an overdrawn history should expect to be priced nearer the top than the bottom. When you compare a loan offer with the table, ask the bank how your rate is set, whether it moves when the policy rate moves, and what fees sit on top of the stated rate.
Treasury bill rates and idle cash
The Treasury bill rate is what the Federal Government pays on short-term borrowing. In August 2026 it was 16.30 percent, the same as in July and up from 16.16 percent in June.
For a business, the Treasury bill rate is a benchmark for money that is not working. Cash sitting in a current account earns little. A business with a predictable surplus, such as a seasonal trader after its busy months, can use the Treasury bill rate as the reference point when its bank offers a deposit or money market product. This is a comparison to make with your bank or adviser, not a recommendation to invest.
Putting finance costs into your budget
Rates are only useful if they show up in your own numbers. In Achekam a business can set a budget per account and period and compare it with actual figures from its ledger. That gives you a place to put the finance cost you expect on a loan, the interest you expect to earn on deposits, and a line you hope stays empty: tax penalties and interest.
Management accounts in Achekam show an income statement for a chosen period beside the period before, and a balance sheet at period end, both added up from the business's own journals and exportable as PDF or CSV. Comparing finance costs this quarter with last quarter shows quickly whether a rate change has reached you. One detail to know: the year-to-date preset starts on 1 January, not the business's own year start, so a company with a different year end should choose its period dates by hand.
Reading the rates at the time of writing
A few habits keep the table useful rather than alarming:
- Check the month. Every figure on the CBN table belongs to a month; quote it with that month.
- Watch the MPR after each policy meeting if you have any tax outstanding, because interest on that tax follows it.
- Read loan offers against the prime and maximum rates, and ask where yours sits and why.
- Use the Treasury bill rate as a yardstick for what spare cash could be earning.
- Budget for finance costs as their own line, and review budget against actual each month.
The figures here will be out of date within weeks. The method will not: find the latest month on the CBN's table, then ask what each row costs or earns your business.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
