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Nigeria is flirting with economic disaster, as an investable interest rate hike will further dampen economic growth that is already at 2.80 percent, the lowest in a decade.
This is because the Central Bank of Nigeria (CBN), in its next MPC meeting, will be in an unavoidable dilemma as to whether to increase the MPR in order to curb rising inflation and prevent a further haemorrhaging of a reserve hard hit by a significant drop in oil price or let the status quo remain.
If the apex bank increases the interest rate, it means more businesses cannot access loans at cheaper cost. Also, the cost of accessing loans would be higher and cost of doing business would spiral.
Consequently, people will be discouraged to open new businesses and employ more people. And when jobs are not created, unemployment rate will be high.
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High interest rates discourage additional spending, which doesn’t give the economy the necessary boost in times of slow economic growth.
The Abuja based bank had in March increased the MPR by 100 basis point to 12 percent from 11 percent.
Inflation has risen to 13.80 percent in April from 12.80 percent in March, fuelled by increase in gasoline and electricity prices.
We believe if rates are increased it will exacerbate the already anaemic position of manufacturers who are grappling with the restrictions imposed by the Central Bank.
“In terms with our discussion with central bank, they are more concerned with curbing inflation trajectory, rather than address economic growth. So, yes they are likely to continue hiking despite the fact that growth is weakening,” said Yvonne Mhango, sub-Saharan African economist at Renaissance Capital.
“On the impact it will have on the economy, naturally it is negative, if you look at the transmission mechanism and impact on credit growth and GDP contracting. Their biggest concern is that if inflation gets out of hand, then you are also eroding incomes in the economy. So in a way, the consumer and growth is impacted. But they have chosen to go the path of containing inflation rate hikes,” said Mhango.
There is no Nigeria govt,that did not intended,goodness for Nigeria and for Nigeria since the regime of Gen Gowon.can we Nigeria recall how govt said we will do this for Nigeria.WE HAVE READ A COUPLE OF YEARS AGO.we have read statement made by Mrs Allison-madueke,saying,we will make Nigeria uses gas instead of kerosene for domestic consumption.she came to London and advertises in british newspaper opening her dirty mouth,inviting foreign investors,to invests in Nigeria.iread it,so do most Nigerians,i knew it’s not going to happen sooner or later.now we are reading how Mrs Madueke is being accused of trying to bribe inec official.
Now we are reading from the office of the vice-president,which the esteemed professor posted through twitter.this is our programme for Nigeria.I KNEW IT IS NOT GOING TO HAPPEN BEFORE THE NEXT GENERAL ELECTION.
The spirit of man searches the spirit of god,when you seeks this knowledge or information geninune and sincerely,your spirit and the spirit of this god” meets”,you wants comes to your aid,because he knows it’s for your goodness or happiness.GOD REALLY IS YOU,YOURSELF,BELIEF IN ANY GOD IN ANY ORGANISED RELIGION IS A SIGN OF YOUR WEAKNESS IN HUMAN SPIRIT.
Your excellency.i want your govt prove us wrong.i tell you,it’s not going to happen in Nigeria.history have shown,that the private sectors move faster than the public sectot,it will will only happen if the govt and the private sector together working through and bringing things together,or you breaks things,i.e incentives,easy assess to credit,the knowledge,the information, the private sector will knows govt intention,and that the govt is sincere,AND THAT GOVT WANT THINGS HAPPEN.
By any means so said,malcom x of the nation of islam in America.the means justifies the means,now we are reading that the govt is imposing punitive fine against mtn,this fine will bankrupt this company,and milions of Nigerians will suffer in any way for this fine.who care in Nigeria not president buhari,jerking abroad as he wants to do.