Samuel Nzekwe, a financial analyst, said increasing Monetary Policy Rate (MPR) by the Central Bank of Nigeria from 18.5 per cent to 18.75 per cent would make borrowing higher for the production sector.

Nzekwe, the former president of the Association of National Accountants of Nigeria (ANAN), stated this on Wednesday in Ota, Ogun. He spoke against the backdrop of the outcome of a two-day meeting of CBN’s Monetary Policy Committee.

Acting CBN governor Folashodun Shonubi announced after the two-day meeting on Tuesday in Abuja that the MPR had been raised from 18.5 per cent to 18.75.

Cash Reserve Ratio (CRR) and Liquid Ratio were retained at 32.5 per cent and 30 per cent. The MPR is the baseline interest rate upon which other interest rates are built.

“Increasing interest rate would make borrowing and cost of money, especially for those in the productive sector, costly,” said Mr Nzekwe. “In addition, goods produced under this MPR will become costly and contribute to an increase in the nation’s inflation rate.”

The ex-ANAN president noted that the MPC was trying to moderate the inflation rate, but it would not work because Nigeria imports most of the goods consumed and exports less.

Mr Nzekwe urged the federal government to encourage productivity by creating an enabling environment for the country to have sufficient goods.

He stressed the need to leverage areas where the country had a comparative advantage to produce and import less. 

(NAN)