President Muhammadu Buhari exchanging pleasantries as fromer IMF boss, Christiane Lagrade watch with excitements
More reasons why the Central Bank of Nigeria (CBN), has been maintaining apparently high side of Monetary Policy Rate (MPR) emerged Monday when latest growth statistics showed a drop in Gross Domestic Product (GDP) to 2.01 per cent, a scary development that tends to suggest that Nigeria may reverse to recession if not well managed going forward. Technically to the disadvantages of domestic economic growth, industry pundits are beginning to suspect weak fundamentals in the nation’s economy which hitherto was believed to be doing well until the latest near negative figures.
Otherwise, in all the Monetary Policy Committee (MPC) meetings under the current administration, the MPR has remained high which powers the current high lending rates amongst Nigerian financial institutions.
However, giving fresh angle in defence of the apex bank, the Chief Executive Officer, SEL Capital Limited, Mr Segun Opaleye said in an interview that “It is not as if the CBN is not mindful of the need to have a lower lending rate, rather the true reality is that we are a nation that depends on a lot of Foreign Direct Investments and Foreign Portfolio Investment. And one of the things you can do to encourage these investors is high yield”.
He argued that “Some of them understand the problems in developing nations;” saying “There is a premium they require for foreign investors to find your economy attractive. If you keep the rates low and you do not get what you need to reflate the economy, it is a big problem”.
Opaleye noted further that “There must be strategic direction and plans and at the minimum, it is a three to five-year plan. It is not a knee-jerk response; otherwise, you will kill a lot of things”.
