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Manufacturers, others reject CBN’s retention of interest rate at 14%, calls for review
Barely less than 24 hours after Central Bank of Nigeria (CBN) kept its Monetary Policy Rate (MPR), its base interest rate, at 14 per cent, reactions have started to trail the decision.
Firing the first shot was the Textile companies in Nigeria who have decried the increase in cost of raw materials, saying it, has affected the level of production.
On Wednesday, the Manufacturers Association of Nigeria (MAN) Ogun Chapter, condemned the retention of interest rate by the Monetary Policy Committee of CBN at 14 per cent, saying such development was not good for the manufacturers as well as the economy.
MAN Chairman in the State, Wale Adegbite, said the sector and others will now be faced with more challenges, noting that “As we continue to battle forex access, we will now start to face fresh hurdles in interest rates”.
While decrying that higher interest rate from financial institutions in the country was killing the manufacturers as it was difficult in doing business, he argued that “We will have love a situation where the apex bank reduced the interest rate we paid on loans”.
Adegbite further explained that the manufacturers also needed improvement in the interest rate as most medium scale companies were paying 25 per cent and above as interest rate, saying “This development is not good for the economy because it will be difficult to engage in investment when interest rate is high”.
To him, retaining the monetary policy rate at 14 per cent would not help the manufacturers seeking better interest rate to grow their businesses and “The early the CBN tried to reduce the interest rate, the better for the manufacturers.”
It would be recalled that the CBN Governor lead Committee had retained all rates after a two-day meeting, retained the MPR, Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent.
It would be noted that the monetary policy rate had been retained since July 2016 for the fifth time in a bid to reduce inflation and stimulate economic growth in the country.
The MAN Exco member in Ogun State disclosed that availability of dollars had reduced the exchange rate at the official market rate to N325 to a dollar, describing it as an improvement.