Following the decision by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to further raise the lending rate, otherwise known as Monetary Policy Rate (MPR), members of the organised private sector have expressed mixed feelings with some believing it will further hurt investments.
The Committee further increased the MPR by 50 basis points to 27.25 per cent from 26.75 per cent.
Reacting to the development, Centre for the Promotion of Private Enterprise (CPPE) said the decisions by the apex bank in tightening financial conditions would hurt businesses and slow investments and the economy.
Dr Muda Yusuf, Chief Executive Officer of CPPE, reacted via a statement yesterday while responding to the outcome.
According to Yusuf, it is sad that CBN further tightened monetary policy at a time manufacturers, entrepreneurs and other investors in the economy are struggling and need succour. He said that the latest decision was at variance with the mood of most economic players at this time.
“What manufactures and other investors need at this time is some oxygen and stimulus, not policy measures that would worsen an already suffocating situation.
“The MPR at 27.25 per cent; CRR at 50 per cent, and asymmetric corridor at +500 and -100 are very difficult monetary condition to bear for most businesses. “This is given the prevailing macroeconomic and structural conditions,” he said.
Yusuf said that the second quarter GDP numbers showed clearly that the economy was still in a floundering mode, adding that many critical sectors of the economy slowed during the quarter.
He listed the sectors to include manufacturing and its other sub sectors such as cement, food and beverage, chemicals and pharmaceuticals, trade, ICT and real estate.
He said that the road transport, motor assembly, publishing and motion pictures sectors contracted during the quarter while aviation, oil refining, textile , livestock and quarry and minerals sector were still in recession.