MPR hikes hinder economic recovery, growth – CPPE 

The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that further increases in the Monetary Policy Rate (MPR) could hinder Nigeria’s economic recovery and slow growth in the real sector.

 

Dr Muda Yusuf, Chief Executive Officer of CPPE, gave the advice in an interview with the News Agency of Nigeria (NAN) on Monday in Lagos.

Experts say MPR hike will slow down investments, economic growth

Yusuf urged the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to refrain from further tightening the MPR.

 

He noted that the current monetary conditions were already burdensome for investors in the real economy, with interest rates exceeding 30 per cent.

 

“Further tightening of monetary policy poses significant downside risks to real sector recovery and growth,” Yusuf said.

 

According to him, businesses are seeking relief from monetary and fiscal pressures amid challenges.

 

He identified such challenges as exchange rate depreciation, rising energy costs, high cargo clearing costs and weakened purchasing power.

 

Yusuf noted that all of which are negatively affecting performance and slowing economic recovery.

 

Another financial expert, Prof. Olukayode Somoye, also called for a reduction in the MPR.

 

Somoye at the Faculty of Administration and Management Sciences, Department of Banking and Finance, Olabisi Onabanjo University, Ogun State, emphasised that the current MPR is particularly detrimental to small-scale enterprises.

 

“The simple thing to do is to reduce the MPR -Monetary Policy Rate.

 

“This will likely reduce the rising inflation and increase the level of investment; especially with the current interest rate.

 

“The capital market will rebounce, while the Naira exchange rate may have a rise in the value. This will, thereby, make the nation’s import less expensive.

 

“The current monetary policy rate (MPR) is anti-investment to industries, particularly the small-scale enterprises,” he said.”