Prominent figures in the Nigerian business and economic sector have opposed the recent increase in interest rate by the Central Bank of Nigeria Monetary Policy Committee.
Dele Oye, the President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture(NACCIMA) , and Femi Egbesola, the President of the Association of Small Business Owners of Nigeria (ASBON), expressed their concerns separately on Tuesday, stating that the CBN’s decision to raise the interest rate to 27.25% would significantly affect the growth of businesses and investments in Nigeria.
The concerns raised by Oye and Egbesola come in the wake of the CBN MPC’s unanimous announcement of a 50 basis points interest rate hike, marking the fifth increase since February 2024.
CBN Governor Olayemi Cardoso emphasised that further tightening of monetary policy would help control the 32.15% inflation rate in August and stabilise the country’s foreign exchange.
However, Dele Oye criticised the decision to increase the Monetary Policy Rate, MPR, stating that the rate hike would worsen the challenges faced by businesses already struggling with the adverse effects of foreign exchange fluctuations and inflation.
He said, “This decision burdens businesses with higher loan costs, exacerbating their struggles and failing to curb inflation or stabilise the naira”.
Egbesola said the hike would raise the cost of doing business and the prices of goods and services.
“This definitely will push up further the cost of doing business and ultimately the cost of goods and services.
“The manufacturing sector may contract more as fund liquidity and profitability will surely reduce”, he said.