Expert tasks FG on low interest rate regime

A financial expert has tasked the Federal Government to consider the full implementation of a low interest rate regime in the implementation of its ongoing economic diversification campaign.
 The expert, from the Macroeconomic Group Surveillance and Forecasting Department of the Nigerian Institute of Social and Economic Research (NISER), Ibadan, Mrs. Olusade Taiwo, made the call in the Oyo State capital while delivering a lecture under the auspices of the Institute’s research seminar series.
 In her paper entitled ‘Macroeconomic Effects of Monetary Policy Rate in Nigeria’, Taiwo specifically suggested low interest rate regime in the country to have a smooth diversification of the national economy in the areas of agriculture, mining, manufacturing and production, “given the importance of these sectors to the achievement of economic diversification and transformation”.
While calling for a carefully but crafted differentiated interest rate system that targets specific sectoral objectives to meet the individual demand of each sector of the economy, the financial expert insisted on the implementation of a concessionary low interest rate to stimulate productive activities in the manufacturing and agricultural sectors to fast-track the achievement of the economic diversification and transformation.
In actualizing the goal, Mrs Taiwo advised government to minimize pressures on exchange rate, inflation and foreign reserves by providing a policy to reduce foreign components with domestic substitutes in production processes.
 “Efforts should be re-intensified to resolve lingering issues such as pricing assets, obsolete equipment and gas supply hindering the performance of the sector, and ensure improved power supply to the various sectors of the economy,” she further stated.
 The financial expert also enjoined government to target developing an optimal power generation mix involving hydro, gas thermal and nuclear power plants to hedge against disruption by natural or man-made incidences.