The Manufacturers Association of Nigeria (MAN) has said that the reduction of the Monetary Policy Rate (MPR) from 13 percent to 11 percent is not enough.
The president of MAN, Dr Frank Udemba, made the remark in Abuja on Wednesday in an interview with newsmen.
He said that the two percent reduction announced by the Monetary Policy Committee would not have much impact on bank lending rates.
He said: “It is a good development but I think the Central Bank of Nigeria (CBN) should do more.
“This is because whatever MPR that is pronounced affects the lending rate from banks to manufacturers and other customers.
“The reduction will be highly marginal knowing the system in which we operate.
“Banks are lending at between 23 percent and 28 percent. So, a two percent reduction will bring the lending rate down to between 21 percent and 27 percent, which is still very high.’’
Udemba said that MAN’s expectation was for the MPR to be slashed to five percent to bring down the lending rate to 10 percent at most.
According to him, stimulating the manufacturing sector with access to affordable finance is critical to economic diversification.
He noted that accessing funds at affordable rates was one of the challenges facing manufacturers, hence the need for further reduction of MPR.
The MAN president urged Central Bank of Nigeria (CBN) to relax the conditions for accessing its N300 billion real sector support facility and other intervention funds for the real sector.
He said the stringent conditions attached to the funds were making them unattractive and inaccessible to manufacturers.
Udemba said the association was also concerned about the level of infrastructure decay in the country and called on the Federal Government to urgently address the situation.
“You cannot talk of competitive manufacturing unless you have stable power supply, good road and rail networks, among other critical infrastructure.
“These things are not readily available in the country right now and it makes manufacturing less competitive,’’ he added. (NAN)