Professional bodies in earnest wait for CBN’s interest rate cut

Stakeholders in the financial services sector as well as the Association of Professional Bodies of Nigeria (APBN) are in earnest wait for the implementation of the interest rate reduction by the Central Bank of Nigeria (CBN).

They expressed displeasure that people find it difficult to access fund to carry out their businesses.

Godwin Emefiele, the CBN governor, had said he would pursue a gradual reduction in interest rates, an apparent shift away from his predecessor’s hawkish monetary policy that was credited with bringing inflation down to single digits.

The policy would be aimed at seeking a reduction in overall lending rates to make it cheaper to invest, Emefiele said, although he didn’t give a time frame for doing so, leaving it open for him to hold off until the monetary conditions allow it.

Interest rates have been stuck at 12 percent since late 2011, and several measures have been made to tighten liquidity, credited with gradually bringing down inflation, but businesses complain that lending rates are too punitive.

“What the new CBN governor said is quite a good decision in the right direction. If interest rates are high, people find it difficult to access money to carry out business. And if Nigerians do not have money to fund their businesses that means our economy will be affected internally,” Bala Ka’Oje, president, APBN, said in an interview.

If you try to compare interest rates of countries outside Nigeria with what is obtainable in the country, you will marvel, because theirs are lower, he said.

“In abroad, you hardly find it difficult to see where the interest rate is above one digit. It is mostly 6 percent and below in countries in Europe, America, and Asia. When you come to Nigeria, you will see that interest rate is more than 29 percent. That’s unfortunate, there is no how you can borrow money from the bank and own a house of your own. The economy is not for common man, because there is no how they can benefit in any way from the banks because the interest rate is too high. By the time you borrow money from the bank everything goes to the banks. We hope what the CBN governor said will happen, we are waiting for it to happen. It will enable people to improve their businesses,” he said.

HOPE MOSES-ASHIKE