Group Reacts as CBN Adjusts Changes to Interest Rate for Customers of Access, UBA, GTB, Others
- The organised private sector is concerned that bad loans may get worse as a result of the new rate
- This occurred after the CBN recently increased the monetary policy rate to 27.25% for the sixth time this year
- Business owners said this will result in higher operational costs and higher prices for goods and services
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
Following the decision of the Monetary Policy Committee of the Central Bank of Nigeria to raise interest rates, the organized private sector is worried that this could make bad loans in different deposit money banks worse.
Source: Getty Images
This comes after the MPC decided on Tuesday, September 24, 2024 to raise the monetary policy rate—which sets the benchmark interest rate—to 27.25 percent for the fifth time this year.
How OPS reacts
The Association of Small Business Owners of Nigeria's national president, Dr Femi Egbesola, expressed disappointment that the increase was taking place again at a time when manufacturers and real sector participants were still dealing with a variety of problems, including high operating costs.
He said that the development will certainly result in higher operational costs and, eventually, higher prices for goods and services.
Egbesola added that the industrial sector might contract considerably more as fund liquidity and profitability inevitably deteriorate.
“The banks or financial institutions may witness more bad debts as many lenders may find it difficult to live up to their loan obligations. This will result in banks being averse to lending to the real sector.”
Egbesola further said the economy would likely continue to diverge, forcing real sector participants to cut back on their borrowing, expenditure, and requirements for human resources as well as their production capacity and loan exposure.
He added:
“We may begin to see more ailing or comatose businesses.
“Our competitiveness in the national, continental and global business will be further challenged as Made-In-Nigeria products will be naturally more expensive than before amongst others.
“It’s time the government becomes more intentional about promoting ease of doing business, supporting and practically intervening in the health, growth, scaling and sustainability of the SMEs and manufacturing sector.”
Reasons marketers cannot lift petrol
Legit.ng previously reported that the Nigerian National Petroleum Company Limited said that oil marketers cannot import or buy petrol from Dangote refinery because the product is not viable and cost-reflective.
Dapo Segun, executive vice president of the NNPC's downstream division, said no one was excluded from petrol imports.
He said the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has approved import permits.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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