Nigeria Manufacturers have knocked CBN over an interest rate hike to 18.5 per cent.
NewsOnline reports that the Manufacturers Association of Nigeria has knocked the Central Bank of Nigeria’s decision to increase the Monetary Policy Rate, also known as the interest rate, to 18.5 per cent amid rising inflation.
Segun Ajaji Kadir, the Director General of MAN disclosed this on Thursday in a statement.
MAN’s reaction comes against the backdrop of the continued increase of MPR by CBN’s Monetary Policy Committee because it would curtail the country’s rising inflation which stood at 22.22 per cent in April.
The Director of MAN stated that the CBN must think outside the box to solve the country’s rising inflation.
Kadir noted that CBN’s approach to curbing rising inflation through interest rate rise resulted in more woes in the nation’s economy.
According to him, the increase in borrowing costs would further discourage investment in the sector.
He explained that the increase in interest would instead lead to high production costs, leading to higher commodity prices and inventory of unsold manufactured products.
“The increase will compound the imminent recession in the manufacturing sector and negatively impact its operations in so many ways.
“Increase in the cost of borrowing will further discourage investments in the sector; high cost of production will lead to higher commodity prices and inventory of unsold manufactured products.
“Therefore, the government must think outside the conventional monetary policy framework and take pragmatic steps to quell the inflationary pressure and reposition the economy”, he stated.