Recession: Institute backs lower interest rate

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Kemi Adeosun, Minister of Finance
Kemi Adeosun, Minister of Finance

By Bukola Adetoye

The Institute of Loss Adjusters of Nigeria (ILAN) on Tuesday expressed support for the finance minister’s call for banks to lower interest rate to assist the country quickly out of recession.

The President of ILAN, Mr Ralph Opara, told the News Agency of Nigeria (NAN) in Lagos that the reduction would stimulate the economy.
The Minister of Finance, Mrs Kemi Adeosun, said that a lower interest rate was necessary to boost the economy without increasing debt servicing costs.
The ILAN boss said such step would be the best thing that had ever happened to the economy, particular to revive the real sector.
“The interest rate must be reduced close to single digit, if not single digit, in order to stimulate the real sector.
“Now, it is an average of 25 per cent and that is too high.
“When you are in a recession, the real sector is dead and this can make it last longer,” he said.
Opara advised that the benchmark interest rate should be reduced to 10 per cent from the current 25 per cent while the lending rate should be around 13 from the current 17.14 per cent
Opara also urged the Federal Government to shun unsuitable advice by some stakeholders to enable the country to  get out of the current recession.
He said the suggestion by former NNPC directors that the price of petrol should be hiked to enable the corporation to generate more funds was not suitable.
“That the N145 current price is not congruent with the current foreign exchange liberalisation policy is fallacious.
“The Federal Government should shun bad advice capable of attracting massive public revolt.
“The government must be prudent enough to discern between good and bad advice that could make or destroy its good plan for Nigerians,’’ he said.

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