Economic recession: MAN, LCCI, Rewane, others ask CBN to cut interest rate

Industry players from the private sector have called on the Federal Government to reduce interest rate to stimulate economic recovery.

They said that is a key measure to manage the economy amidst recession.

The professional bodies that gave the advice on Thursday are the Manufacturers Association of Nigeria, the Lagos Chamber of Commerce and Industry, the Abuja Chamber of Commerce and Industry and other organised private sectors.

 

According to renowned economists including the Chief Executive Officer, Financial Derivatives Limited, Mr. Bismarck Rewane,  government should urgently review its policies and spend more to attract both local and foreign investors to invest in the country's economy.

CBN Governor, Mr. Godwin Emefiele

The National Bureau of Statistics last Wednesday released the Gross Domestic Product figures for the second quarter of 2016, whose growth rate slid from -0.36 per cent in the first quarter to -2.06 per cent.

It also released the capital importation report for the second quarter, the unemployment statistics report, the inflation report for the month of July and the labour productivity report for the month of July, all of which painted a negative picture of the Nigerian economy with inflation rising as high as 17.1 per cent from 16.5 per cent, unemployment rate increasing to 13.3 per cent from 12.1 per cent and investment inflows dropping to its lowest levels at $647.1m from $710m.

The President of MAN, Dr Frank Jacob, said the interest rate should be reduced from over 22 per cent to five per cent in the belief that it would enable manufacturers to borrow for productive purposes.

“Some of the requests that we’ve been making from the government should be looked into. To reflate this economy, they need to reduce the interest rate on loans to five per cent", he said.

Dr. Jacob added that; “They can also create a special window for manufacturers to source foreign exchange and make it readily available for them as and when they are needed. And of course, the issue of infrastructure should be addressed, especially power and road.”