The Manufacturers Association of Nigeria, MAN, has expressed dismay over the continued retention of the MIR at 14 percent by the apex bank.
President of the association, Dr. Frank Udemba Jacobs who made the feelings of the manufacturers known at a media parley in Lagos disclosed that the association has been having a running battle with the Central Bank of Nigeria, CBN. He said for this reason ,MAN, will continue to criticize the high Monetary Policy Ratio (MPR) because MPR at 14% means the Deposit Money Banks cannot lend at anything lower than 20 percent and there is no way you can expect any industrial activity to progress if you operate at that level of interest rate.
He said “as far as I am concerned, the MPR at 14% is high and even though they have introduced some palliative measures such as the intervention funds that have been made available to the manufacturing sector and other sectors of the economy, we think that is not enough” he added.
Government, he insisted should try to improve the position of the Bank of Industry and the Development Bank of Nigeria so they can be able to give out loans at single digit interest rate.” These are ways to further cushion the un-salutary effect of the MPR at 14 percent because obviously it is too high, he reiterated.
Dr. Jacobs however expressed optimism that the contribution of the manufacturing to economic growth and Gross Domestic Product, GDP, will improve significantly in 2018.
Reviewing the performance of the economy in the year 2017, the president of MAN, said “there is some improvement within the manufacturing sector especially when you compare 2017 with 2016. but I think 2018 will be much better.” He noted that though the sector’s contribution to GDP in the out gone year was 9 per cent, the expectation is that this will improve considerably in the present year.
He maintained that the outlook is borne from the fact that 2019 s an election year and that most part of 2018 will be used for electioneering campaigns.
According to him, the year 2018 will witness massive political spending which will to a great extent put money in the hands of the populace thereby increasing their purchasing power and propensity to spend.
He insisted that this will mean higher purchases especially for consumer products and this will also mean increased productivity.