…Seeks further MPR cut, special financing window
The Manufacturers Association of Nigeria (MAN) have continued to bemoan the high interest rates in the country, noting that the situation has place the nation’s manufacturing sector at a competitive disadvantage against other countries of the world.
Director General of MAN, Segun Ajayi-Kadir, noted this while expressing optimism that the recent decision 50 basis points reduction in MPR by the Central Bank of Nigeria’s (CBN) will pave the way for deeper cuts in lending rates to boost the struggling manufacturing sector in the country.
He lamented that manufacturers have over the past five years endured high borrowing costs driven by an aggressive tightening policy stance of CBN.
“With recent reforms moderating inflation, stabilizing the exchange rate, and improving investor confidence, the timing is right for the central bank to gradually relax rates.
“We are definitely looking forward to further reduction. If you give a manufacturer anything more than 5% to pay as interest, competitiveness is compromised, as our rivals are borrowing at much lower rates. You are not going to get anything out of it because those with whom you compete are not borrowing at that rate,” he stated.
Ajayi-Kadir reiterated the need for a special financing window for manufacturers to enable them access loans at rates below the MPR.
According to him, such a concession is pivotal for driving industrial growth, urging the apex bank make an “intentional decision” to create conditions that make commercial banks more willing to lend to manufacturers and thus contribute significantly to economic growth.
Recall that the Monetary Policy Committee (MPC) of the apex bank had last week at its 302nd meeting, in Abuja, reduced the MPR by 50 basis points, lowering it from 27.5 percent to 27 percent.
Alongside the MPR cut, the committee also narrowed the asymmetric corridor around the benchmark rate to +250 and -250 basis points, from the previous +500/-100 basis points.
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