Yesterday, the Manufacturers Association of Nigeria said retaining the Monetary Policy Rate at 14% by the apex bank would negate development of manufacturing sector. Mr. Frank Jacobs, President of MAN, told the News Agency of Nigeria in Lagos that the 14% MPR would not boost domestic production. The MAN president also said that maintaining the present rate would prevent the manufacturing sector from coping with the current economy downfall. The Central Bank Governor, Mr. Godwin Emefiele, had announced MPC decision to retain the MPR at 14% at the end of its two-day meeting last week. Apart from retaining the MPR at 14%, the CBN governor said the committee also voted to retain the Cash Reserves Ratio at 22.5 per cent.
We had taught that bringing down the rates will enable banks to reduce percentage of getting loans to inject into the manufacturing sector to re-flate the economy. However, with the present circumstance, many domestic producers will be struggling to keep their businesses as a going concern and will not make profits. As a result of the economy downfall, most manufacturers will want to shed down workers, which will have negative social implication for the country,” he said. The MAN president urged the apex bank to bring down the interest rates in its next monetary policy meeting to ensure development in the manufacturing sector. “It is only when rates are brought down that the manufacturers will be able to sustain and expand their businesses, even during the economy downfall,” he said. Jacob said that with the right incentives, the manufacturing sector could cause an economic turnaround for the country.
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