MAN Criticizes 14% Lending Rate
Chairman, Manufacturers Association of Nigeria (MAN) Ogun Chapter, Mr Wale Adegbite has expressed disappointment over the Monetary Policy Committee (MPC) ‘s decision to retain a the monetary policy rate.
Adegbite expressed his view in an interview with newsmen in Ota, Ogun.
He said MPC could have reduced the policy rates so as to jump-start the economy after the long seizure for close to two years.
“We hope that the rate would have started coming down now because we need a lower interest rate so as to increase activities in the manufacturing sector, “the chairman said.
Adegbite said that with lower interest rate, the manufacturer would be able to produce at the optimal level as well as adding value to the nation’s Gross Domestic Product (GDP).
It would be recalled that MPC had on Wednesday, concluded its two-day meeting and retained all the monetary policy rates.
The benchmark interest rate is at 14 per cent with the asymmetric corridor between 200bps and 500bps around.
The Cash Reserve Ratio (CRR) is at 22.5 per cent and the Liquidity Ratio at 30 per cent.
The Manufacturers Association of Nigeria, MAN, has called on the Central Bank of Nigeria, CBN, to drop the lending rate from 14 per cent to accelerate productivity and economic growth.
Economic Confidential recalls that the manufacturers had made these appeals since 2016 and 2017 when the CBN retained all rates and particularly a 14 per cent lending rate to commercial banks since July 26, 2016 in its bid to check inflation and stimulate economic growth.
MAN President, Mr. Jacobs had then urged the apex bank’s Monetary Policy Committee to review the lending rate downward at its subsequent meetings.
According to him, the high interest rate regime had stifled growth, productivity and competitiveness of manufacturers.
He noted that with the appreciation of the naira and further drop in inflation rate, friendlier policies that would stimulate economic growth and boost production should be embraced.
Jacobs also urged CBN to create five per cent concessionary interest rate for manufacturers to drive the nation’s diversification agenda and increase contribution to the Gross Domestic Product.
“If manufacturers have access to low interest rate as done in other climes, we will be able to employ more people and create wealth for the nation through tax,” he said.