{"id":93331,"date":"2023-08-01T11:33:05","date_gmt":"2023-08-01T10:33:05","guid":{"rendered":"https:\/\/www.africa-press.net\/nigeria\/uncategorized\/concerns-mount-over-cbn-interest-rate-hike-amid-hardship"},"modified":"2023-08-01T13:47:29","modified_gmt":"2023-08-01T12:47:29","slug":"concerns-mount-over-cbn-interest-rate-hike-amid-hardship","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/nigeria\/economy\/concerns-mount-over-cbn-interest-rate-hike-amid-hardship","title":{"rendered":"Concerns mount over CBN interest rate hike amid hardship"},"content":{"rendered":"

Africa-Press – Nigeria. <\/strong><\/span>Financial experts are not at ease with some of the economic policies of President Bola Ahmed Tinubu.<\/p>\n

From fuel subsidy removal to Naira floating and the current Monetary policy rates hike from 18.5 per cent to 18.75 per cent, Nigerians groan amid the biting hardship.<\/p>\n

For over six months, the Central Bank of Nigeria\u2019s Monetary Policy Committee has continued to increase interest rates in a bid to tackle inflationary pressures, which stood at 22.79 per cent in June, according to the National Bureau of Statistics.<\/p>\n

The CBN acting Governor, Mr Folashodun Shonubi said the modest increase in the benchmark interest rate curtailed a potential uptick in inflationary pressures resulting from the policy changes.<\/p>\n

But despite the apex banks\u2019 efforts, the inflation pressures have remained unabated in the past six months.<\/p>\n

From 16.50 per cent in December 2022, CBN had increased the interest rates to 18.75 per cent.<\/p>\n

Stakeholders within the economic sector had not hidden their discontent with the number of policies by the Tinubu-led administration in the face of the hardship Nigerians face.<\/p>\n

Nigeria\u2019s organised private sector, OPS, the Lagos Chamber of Commerce and Industry, LCCI, and the Nigeria Employers\u2019 Consultative Assembly, NECA, described the recent hike in the Monetary Policy Rate, MPR, by CBN as a complete contradiction to Tinubu\u2019s pledged commitment to make credit available to businesses and individuals at an affordable rate.<\/p>\n

DAILY POST recalls that Tinubu promised on May 29 during his presidential inaugural address that \u201cmonetary policy needs a thorough house cleaning. Interest rates need to be reduced to increase investment and consumer purchasing in ways that sustain the economy at a higher level.\u201d<\/p>\n

However, the turn of events have continued to threaten the already bleak hope in the minds of Nigerians.<\/p>\n

Experts say one of the significant implications of interest rate hike is that businesses, especially Small and Medium Scale Enterprises, must pay more to access finances.<\/p>\n

Accordingly, they urged the government to consider growth-focused interventions.<\/p>\n

An accounting and financial development don at Lead City University, Ibadan, Prof Godwin Oyedokun, told DAILY POST in an interview on Monday that the decision of the government to hike interest rates does not make sense.<\/p>\n

According to him, it is improper for the CBN to keep repeating the same thing that has failed over time and expect improved results.<\/p>\n

He said what the government should do at this moment is to provide adequate infrastructure and stabilise the prices of goods and services with proper regulatory policies and other growth-driven interventions.<\/p>\n

\u201cIt does not make sense to continue to do the same thing and expect a different result.<\/p>\n

\u201cThe CBN has been raising the interest rates over time, yet there has been no result because the fundamentals are not there.<\/p>\n

\u201cWhat the government should do is price stabilisation, work on the Consumer Price Index, and provide adequate infrastructure, especially electricity. Of Course, price monitoring is critical; if this can be done, inflation will come down,\u201d he said.<\/p>\n

Similarly, the Director of the Centre for the Promotion of Private Enterprise, CPPE, Dr Muda Yusuf, stated that CBN\u2019s decision to raise interest rates would hurt investors in the real economy.<\/p>\n

\u201cThe hike in rate would hurt investors in the real economy as they are already grappling with numerous headwinds. These include the spiking energy cost, depreciating exchange rate, increasing cost of logistics, weak purchasing power, and spiralling inflation.<\/p>\n

\u201cThe main drivers of inflation now are the twin problems of rising energy costs and the depreciating exchange rate.<\/p>\n

\u201cMeanwhile, the increase in MPR is unlikely to impact inflation significantly. The transmission mechanism of monetary policy instruments on inflation is fragile because of peculiarities of the Nigerian economy\u201d, he stated.<\/p>\n

Also, Idakolo Gbolade, Chief Executive Officer of SD & D Capital Management lamented that only little effort had been made by the government on the issue of fuel subsidy palliatives which have caused untold hardship for the people.<\/p>\n

He urged the government to take urgent measures to assuage the people\u2019s fears by providing immediate respite.<\/p>\n

\u201cThe MPC\u2019s decision to further raise interest rates was due to crippling inflation, which the new policy direction of the government has compounded.<\/p>\n

\u201cThe subsidy removal and exchange rates measure added pressures to the inflationary trend.<\/p>\n

\u201cThese measures have started yielding positive results as regards government revenues increasing to almost 2 trillion Naira in June 2023.<\/p>\n

\u201cHowever, little has been done on the issue of realistic palliative to the people, which has caused untold hardships and has increased the number of multi-dimensionally poor Nigerians to about 60 per cent of the population.<\/p>\n

\u201cThe Bola Tinubu government needs to take urgent measures to assuage the people\u2019s fears by ensuring that immediate respite is provided for the people.<\/p>\n

\u201cThe NLC\u2019s impending strike is a fallout of the perceived government\u2019s failure to address the raging economic crisis affecting the Nigerian people urgently\u201d, he stated.<\/p>\n

For More News And Analysis About Nigeria<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Nigeria. Financial experts are not at ease with some of the economic policies of President Bola Ahmed Tinubu. From fuel subsidy removal to Naira floating and the current Monetary policy rates hike from 18.5 per cent to 18.75 per cent, Nigerians groan amid the biting hardship. For over six months, the Central Bank […]<\/p>\n","protected":false},"author":84,"featured_media":93330,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[1570,2140,503,254],"class_list":["post-93331","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-nigeria-2","tag-cbn","tag-nigeria"],"yoast_head":"\nConcerns mount over CBN interest rate hike amid hardship - Nigeria<\/title>\n<meta name=\"description\" content=\"Financial experts are not at ease with some of the economic policies of President Bola Ahmed Tinubu. 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