Interest Rates Unfavourable, MAN Cries Out

By Ikenga Chronicles November 29, 2016

Interest Rates Unfavourable, MAN Cries Out

The Manufacturers Association of Nigeria (MAN) yesterday urged the Central Bank of Nigeria (CBN) to reduce its interest rates in order to help the sector in its production. MAN said the current Monetary Policy Rate (MPR) at 14 per cent by the CBN, hampers the growth of the manufacturing sector.
President, MAN, Mr Frank Jacobs,  in Lagos, said  that the 14 per cent MPR would not boost domestic production but will instead, prevent the manufacturing sector from coping with the current recession.
It would be recalled that CBN Governor, Mr Godwin Emefiele,  announced MPC decision to retain the MPR at 14 per cent at the end of its two-day meeting last week. Apart from retaining the MPR at 14 per cent, the CBN governor said the committee also voted to retain the Cash Reserves Ratio at 22.5 per cent.
“We had thought that reducing the rates will enable banks to reduce percentage of getting loans to inject into the manufacturing sector to re-flate the economy.”
“However, with the present circumstance, many domestic producers will be struggling to keep their businesses as a going concern and will not make profits. As a result of the recession, most manufacturers will want to shed down workers, which will have negative social implication for the country.” he said.
But in their reaction, MAN urged the apex bank to reduce the interest rates in its next monetary policy meeting to ensure growth in the manufacturing sector.
“It is only when rates are brought down that the manufacturers will be able to sustain and expand their businesses, even during recession” Jacobs said.
Jacobs said that with appropriate incentives, the manufacturing sector could cause an economic turnaround for the country.
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