The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said that the federal government is providing up to N1 billion in credit facilities to large enterprises, including manufacturers, at a 9% interest rate.
The Minister made this statement during an interview on Channel TV on Sunday on the state of the economy.
Edun mentioned that both large and small-scale businesses can access the loan at no more than 9% interest.
According to him, small-scale businesses can obtain loans up to N1 million, while large industries are eligible for as much as N1 billion, all at the same modest interest rate.
“Our emphasis is that we make sure that we ramp up the speed and the scale of the help that is there. We are offering loans at 9% for medium-scale enterprises for up to N1 million for small enterprises.
“And for the larger enterprises, we are offering up to N1 billion funding at 9% so that those manufacturing firms can invest, grow the economy, employ people, and produce more goods that will help push down inflation.
“As I said, for the largest enterprises, the government did sit down with the private sector, the manufacturer association and other stakeholders and the governors to provide an economy stabilization plan and have the measures announced,” Edun said.
On CBN’s High-Interest Rate
Speaking on the increase in interest rate on the part of the Central Bank, Edun noted that the position of the apex bank is already working in reining in inflation.
He said the inflation rate has gradually declined quarter by quarter this year as opposed to that of last year.
According to him, the government needs to “stay the course” to ensure that inflation is brought down as well as the prices of goods and services.
“It is very rare that the monetary authorities set as their target fighting inflation, bringing down prices generally. We have seen gradual growth quarter by quarter. Compared to the first quarter last year, growth is up. It is up to about 2.9% above population growth. You do have the economy growing in the right direction.
“We just need to stay the course and in staying that course, help is being given across the board,” Edun added.
What you should know
The CBN last May increased the monetary policy rate by 150 basis points to 26.25% from 24.75%.
Many business owners and stakeholders lament that this hawkish position of the apex bank will affect the economy negatively, particularly making it difficult for them to access loans.
For instance, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) said the policy could inadvertently cause inflation, with businesses likely to increase the prices of goods and services to offset the higher borrowing costs.
Others also have raised similar concerns adding that the rate increase is counterproductive and that the will not address money supply challenges in the country.