Concerned stakeholders have advised the Central Bank of Nigeria (CBN) to reduce interest rate to stimulate the economy for quick recovery from recession.
The call was made by Manufacturers Association of Nigeria, Lagos Chamber of Commerce and Industry, Abuja Chamber of Commerce and Industry and business persons.
According to Punch newspaper, the Chartered Institute of Finance and Control and the Institute of Fiscal Studies of Nigeria are among those supporting the lowering interest rate.
The reduction in interest rate, they argued, would pep up local and foreign investments.
National Bureau of Statistics had released the Gross Domestic Product figures for the second quarter of 2016, whose growth rate slid from -0.36 per cent in the first quarter to -2.06 per cent.
It said Nigerian economy with inflation rising as high as 17.1 per cent from 16.5 per cent, unemployment rate increasing to 13.3 per cent from 12.1 per cent and investment inflows dropping to its lowest levels at $647.1 million from $710 million.
Quoting the President of MAN, Dr Frank Jacob, the newspaper said, the interest rate should be reduced from over 22 per cent to five per cent.
“Some of the requests that we’ve been making from the government should be looked into.
“To reflate this economy, they need to reduce the interest rate on loans to five per cent.
“They can also create a special window for manufacturers to source foreign exchange and make it readily available for them as and when they are needed.
And of course, the issue of infrastructure should be addressed, especially power and road.”
The Director-General, Nigeria Employers’ Consultative Association, Mr. Olusegun Oshinowo, said most nations that had been in recession embarked on prudent spending as a way out.
“We have to be able to identify critical sectors of the economy that have impact on other sectors, such as infrastructure which is about road, rail, air and sea transportation.’’
The Director-General, LCCI, Mr. Muda Yusuf, said Nigeria should inspire the confidence of investors and stimulate more investment in infrastructure.
According to the NBS, the Consumer Price Index (CPI) in July shows inflation increased by 17.1% (year-on-year), 0.6% points higher from the rate recorded in June (16.5%).
“Increases were recorded in all COICOP divisions which contribute to the Headline index reflecting higher prices across the economy.
“The pace of the increase in the headline index was however weighed upon by a slower increase in three divisions; Health, Transport, and Recreation & Culture divisions.’’