The Manufacturers Association of Nigeria (MAN) has expressed dissatisfaction with the decision of the Central Bank of Nigeria (CBN) to raise the country’s Monetary Policy Rate (MPR), commonly referred to as Interest Rate, to 18.5% amidst rising inflation.
In a statement released on Thursday by the Director General of MAN, Segun Ajaji Kadir, the association opposed the continuous increase in MPR by the CBN’s Monetary Policy Committee. The CBN believes that increasing MPR would curb the country’s rising inflation which stood at 22.22% in April.
The Director of MAN stated that the CBN should explore alternative ways of curbing inflation instead of relying solely on interest rates hikes. Kadir revealed that the CBN’s approach to addressing inflation through interest rate hikes would result in more problems for the nation’s economy.
Kadir explained that the increase in borrowing costs associated with the interest rate hike would further discourage investment in the sector. Instead of helping, the hike would lead to higher production costs, which would lead to higher commodity prices and inventory of unsold manufactured products.
He stated, “The increase in interest will compound the imminent recession in the manufacturing sector and negatively impact its operations in so many ways. Therefore, the government must think outside the conventional monetary policy framework and take pragmatic steps to quell the inflationary pressure and reposition the economy.”
