The Edo State Governor, Mr. Godwin Obaseki, has predicted tougher economic times for the country due to bad economic policies by the Federal Government, condemning the decision of the Central Bank of Nigeria (CBN) to increase the interest rate to 22.75 percent.
The Monetary Policy Committee (MPC) of the CBN had last week raised the Monetary Policy Rate (MPR), also known as the benchmark interest rate by four hundred basis points to 22.75 percent from 18.75 percent.
Obaseki, who spoke at the annual Edo Zone Bankers’ Committee Dinner held in Benin City, the Edo State capital, cited the potential adverse effect of the interest rate increase by the CBN on businesses and the nation’s economy, reiterating the need to focus on productive activities.
“The next few months will be difficult because the policies rolled out by CBN will unfortunately not support growth in our economy. The interest rate is already high and jacking it up will not allow small businesses access to credit to make them grow.
“We must focus on the fundamentals which is increasing production, making sure our citizens produce what we consume and depend less on imports. Our economic and monetary policies should not be determined by exchange rate alone.
“The issue of increasing the cash reserves in a bid to tighten liquidity is going to be detrimental to our economy. We should focus on fiscal issues to enable us to grow our economy, not panic about the interest rate. Creating jobs should be a priority for us as a nation.”
Obaseki tasked commercial banks to come up with products and services which can assist the majority of citizens in overcoming the harsh economic realities experienced nationwide.
He reassured that his government will continue to partner with the financial sector to cushion the effects of the present economic realities on the people of the state.
Noting that his government has over the last seven and half years undertaken several policies and programmes to reposition the State as a leading subnational in terms of GDP growth, the governor reaffirmed his government’s commitment to the welfare of the people.