Key players in the Nigerian business and economic sector have raised alarm over the recent interest rate hike by the Central Bank of Nigeria (CBN) Monetary Policy Committee.
President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, Dele Oye and the President of the Association of Small Business Owners of Nigeria, Femi Egbesola in separate statements on Tuesday, 24 September, 2024 said the CBN interest rate to 27.25 percent would impact heavily on the growth of businesses and investments in Nigeria.
Their concerns come as the CBN MPC in a unanimous decision by members announced a 50 basis points interest rate increase, for the fifth time since February 2024.
The CBN Governor, Olayemi Cardoso said further monetary policy tightening would help moderate inflation which stood at 32.15 percent in August and stabilize the country’s foreign exchange.
However, Oye faulted the decision to hike the Monetary Policy Rate, MPR.
According to him, the rate hike would worsen the burden on businesses already grappling with the negative impact of foreign fluctuations and inflation.
“This decision burdens businesses with higher loan costs, exacerbating their struggles and failing to curb inflation or stabilize the naira said,” Oye said.
On his part, Egbesola said the interest rate hike will increase the cost of doing business by extension the prices of goods and services will go up.
“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.
