The recent decision by the Central Bank of Nigeria (CBN) to raise the interest rate to 22.75 percent has criticized by Edo State Governor, Mr. Godwin Obaseki, labeling it as ‘detrimental’ to the nation’s economy.
Addressing attendees at the annual Edo Zone Bankers’ Committee Dinner in Benin, Obaseki expressed concerns over the potential negative impact of the CBN’s decision on businesses and the overall economy.
He attributed the anticipated tough times ahead to what he deemed as unfavorable economic policies implemented by both the federal government and the CBN.
“The next few months will be difficult because the policies rolled out by CBN will unfortunately not support growth in our economy. The interest rate is already high and jacking it up will not allow small businesses access to credit to make them grow,”
The CBN’s Monetary Policy Committee (MPC) had recently announced a significant increase in the Monetary Policy Rate (MPR) by four hundred basis points, from 18.75 percent to 22.75 percent.
Obaseki emphasized that the policies adopted by the CBN would hinder economic growth, particularly by limiting access to credit for small businesses. He advocated for a shift towards policies that prioritize increasing production and reducing dependence on imports, emphasizing the importance of focusing on productive activities beyond just exchange rates.
The governor expressed concerns over the potential negative impact of increasing cash reserves on the economy, suggesting a focus on fiscal measures to foster economic growth instead.
Furthermore, Obaseki urged commercial banks to innovate and introduce products and services aimed at alleviating the economic challenges faced by the majority of citizens across the country.
