The Edo State governor, Mr Godwin Obaseki, has flayed the decision of the Central Bank of Nigeria (CBN) to increase the interest rate to 22.75 per cent.
He charged Nigerians to brace up for tougher times due to what he described as bad economic policies by the federal government and the CBN.
Recall that the CBN’s Monetary Policy Committee (MPC) had last week raised the Monetary Policy Rate (MPR), also known as the benchmark interest rate by four hundred basis points to 22.75 per cent from 18.75 per cent.
Speaking at the annual Edo Zone Bankers’ Committee Dinner in Benin, Obaseki noted the potential adverse effect of the interest rate increase by the CBN on businesses and the nation’s economy.
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“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,” he said.
He stressed the need for the nation to focus on the fundamentals by increasing production, making sure citizens produce what we consume and depend less on imports.
He said: “We need to focus on productive activities. Our economic and monetary policies should not be determined by exchange rate alone.
“The issue of increasing the cash reserves in a bid to tighten liquidity is going to be detrimental to our economy. We should focus on fiscal issues to enable us to grow our economy, not panic about the interest rate. Creating jobs should be a priority for us as a nation.”
Speaking on the role of commercial banks in societal development, Obaseki charged the banks to come up with products and services that can assist the majority of the citizens to overcome the harsh economic realities experienced nationwide.
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