Finance Minister, manufacturers demand single digit interest rate

Minister of Finance, Kemi Adeosun says she wants the Central Bank of Nigeria (CBN) to lower interest rates, in a bid to foster growth in the Nigerian economy.



Speaking on Channels TV Sunrise Daily, the minister said she understands the stance of the CBN monetary policy on curbing inflation with higher interest rates, but will also want them, as an independent body, to look at boosting growth.

“As you know, the monetary policy committee is meeting today, and my position has been; look this government is  spending its way out of trouble, and that spending, much of it is being borrowed. So if you increase the interest rate, you increase our cost of debt service,” she said.

“In an ideal world, I need lower interest rates. I think business, when you are in a recession, you cut interest rate to stimulate activity. So, we would love to see the MPC consider how they can help us lower interest rates.

“I do understand what they were trying to do, which was, they are trying to manage inflation. Look at the structural nature of this inflation, it is unlikely to mainly respond to monetary policy initiatives. It’s structural inflation.

Frank Udemba, president, Manufacturers ‎Association of Nigeria (MAN) also called on the CBN to cut rates to drive growth in the economy.

“It is what we have been agitating for since and if the interest rate is brought down, it will be the best decision in the current economic dispensation. It’s a wonderful development,” he said.

“The fact that government now engages the organised private sector and recognising the fact that the private sector is possibly the engine of growth, the driver of the economy.

“So we are happy about that. And this has given us opportunity to air our views and concerning the policies they have and how to get this country out of the current recession.

“We have a lot of challenges of doing business‎ but basically they have to pump in a lot of money into infrastructure because that is a quick way to reflate the economy.”

Godwin Emefiele, governor of the CBN, will on Tuesday afternoon, announce the decision of the policy committee on interest rates.