Manufacturers decry CBN’s retention of interest rate at 14%

Textile companies in Nigeria have decried the increase in cost of raw materials, saying it, has affected the level of production.

The Manufacturers Association of Nigeria (MAN) Ogun Chapter, has condemned the retention of interest rate by the Monetary Policy Committee of CBN at 14 per cent.

The MAN Chairman, Wale Adegbite, said on Wednesday in Ota, Ogun that such development was not good for the manufacturers as well as the economy.

Adegbite was reacting to the retention of the MPR at 14 per cent by the Committee on Tuesday in Abuja.

The monetary policy committee had, after a two-day meeting, retained the MPR, Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent.

The monetary policy rate had been retained since July 2016 for the fifth time in a bid to reduce inflation and stimulate economic growth in the country.

He said that higher interest rate from financial institutions in the country was killing the manufacturers as it was difficult in doing business.

”We will have love a situation where the apex bank reduced the interest rate we paid on loans, ” he said.

According to Adegbite, the major issues concerning the manufacturers were in terms of monetary policy, the exchange and interest rates.

He said that availability of dollars had reduced the exchange rate at the official market rate to N325 to a dollar, describing it as an improvement.

He explained that the manufacturers also needed improvement in the interest rate as most medium scale companies were paying 25 per cent and above as interest rate.

“This development is not good for the economy because it will be difficult to engage in investment when interest rate is high, ” he said.

Adegbite said that retaining the monetary policy rate at 14 per cent would not help the manufacturers seeking better interest rate to grow their businesses.

”The early the CBN tried to reduce the interest rate, the better for the manufacturers.”