Nigeria urged to reduce interest rate

The Nigerian government has been urged to reduce the Monitory Policy Rate (MPR) at 14 percent to ensure growth in the manufacturing sector.

"It is only when rates are brought down that the manufacturers will be able to sustain and expand their businesses, even during recession," Frank Jacobs, President of the Manufacturers Association of Nigeria (MAN) said in Lagos, Nigeria's economic hub Monday.

Jacobs said with appropriate incentives, the manufacturing sector could cause an economic turnaround for the country, noting that retaining the MPR by the apex bank would negate growth of manufacturing sector.

He told reporters that the 14 percent MPR would not boost domestic production, noting that maintaining the present rate would prevent the manufacturing sector from coping with the current recession.

Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele, had announced the decision to retain the MPR at 14 percent at the end of its two-day meeting last week.

Apart from retaining the MPR at 14 percent, the apex bank chief said the committee also voted to retain the Cash Reserves Ratio at 22.5 percent.

"We had taught that reducing the rates will enable banks to reduce percentage of getting loans to inject into the manufacturing sector to reflate the economy," Jacobs said.

According to him, many domestic producers will be struggling to keep their businesses as a going concern and will not make profits, with the present circumstance.

He told reporters that most manufacturers will want to shed workers, which will have negative social implication for the country as a result of the recession. Endit