High lending rates crippling production, MAN INSISTS

The manufacturers association of Nigeria (MAN) has urged the central bank of Nigeria (CBN) to further reduce interest rates to ease the rising cost of borrowing, which continues to stifle production and erode competitiveness in the manufacturing sector.

The association, in its reaction to the outcome of the monetary policy committee (MPC) meeting held on November 24 and 25, stated on Wednesday that while it acknowledged the MPC’S decision to retain the monetary policy rate at 27 per cent, stressed that the current lending environment remains punitive for manufacturers.

As Rockcity had earlier reported, the MPC at its 303rd meeting on November 25, maintained the benchmark rate at 27 per cent, adjusted the standing facilities corridor to +50/-450 basis points, retained the cash reserve ratio at 45 per cent for commercial banks and 16 per cent for merchant banks, and kept the liquidity ratio at 30 per cent.

But MAN is insisting that the high lending rate is adversely affecting businesses, especially manufacturing, arguing that the cost of borrowing must be reduced to allow the economy breath.