·CBN should adopt diversified approach to inflation control - LCCI
The Manufacturers Association of Nigeria (MAN) has called on the federal government to expedite actions on the disbursement of the N75 billion and the recently announced N1trillion intervention loans for the manufacturing sector to douse the effect of continuous hike in interest rate on the productive sector, even as the Lagos Chamber of Commerce and Industry (LCCI) charged the Central Bank of Nigeria (CBN) to diversify its approach to inflation control beyond rate hikes.
Director General of MAN, Segun Ajayi-Kadir, made the call in reaction to the increase in the benchmark interest rate, the Monetary Policy Rate (MPR), to 26.75 percent from 26.25 percent announced by CBN on Tuesday.
Ajayi-Kadir stated: "The government should take deliberate actions to insulate the productive sector from the impact of continuous hike in MPR by expediting action on the disbursement of special provisions earmarked by government for the manufacturing sector. The N75 billion single digit loan approved by President Bola Tinubu over a year ago and the recently announced N1trillion readily comes to mind.
"Offer fiscal support system that will enable the manufacturing sector import raw materials, spare parts and machines that are not available locally at concessionary duty rate; Minimize pressure on foreign exchange (forex) reserves by incentivizing backward integration and local sourcing to decrease reliance on imported products and raw materials; and enforce Executive Order 003 to enhance support for local industries and ramp-up domestic production by restricting access to forex for the importation of products manufactured locally."
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Also reacting, Director General of LCCI, Dr Chinyere Almona, urged the government and CBN to consider a more balanced approach to monetary policy, adding that while controlling inflation is crucial, mitigating adverse effects on business operations and economic growth is imperative.
"The Chamber proposes the following: We should diversify our approach to controlling inflation beyond interest rate hikes. Policies that directly address supply-side constraints, such as improving agricultural productivity and stabilizing energy prices, can help reduce inflationary pressures more effectively.
"Increase investment in infrastructure to alleviate production bottlenecks and reduce business costs. This will enhance productivity and competitiveness, helping to tame inflation from the supply side."
