In addition to criticising the Central Bank of Nigeria’s (CBN) decision to raise the MPR to 22.75 percent, the governor of Edo State, Mr. Godwin Obaseki, predicted tougher times for the Nigerian economy due to what he called the bad policy decisions of the federal government.
The governor claimed that the CBN’s Monetary Policy Committee (MPC) had raised the MPR, also known as the benchmark interest rate, last week by 400 basis points to 22.75 percent from 18.75 percent.
Speaking at the annual Edo Zone Bankers’ Committee Dinner in Benin City, Edo State, Obaseki was quoted in a statement yesterday as highlighting the need to concentrate on productive activities and citing the possible negative impact of the CBN’s interest rate increase on businesses and the country’s economy.
“The coming months will be challenging because the CBN’s policies will regrettably not foster economic growth,” the governor declared. Raising the interest rate will prevent small firms from obtaining the credit they need to expand since it is already too high.
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“We must focus on the fundamentals which is increasing production, making sure our citizens produce what we consume and depend less on imports. Our economic and monetary policies should not be determined by exchange rate alone.
“The issue of increasing the cash reserves in a bid to tighten liquidity is going to be detrimental to our economy. We should focus on fiscal issues to enable us to grow our economy, not panic about the interest rate. Creating jobs should be a priority for us as a nation.”
Obaseki praised the contribution of commercial banks to the advancement of society and directed them to develop goods and services that would help the vast majority of people in the country get through the difficult economic times they are currently facing.
But he gave comfort, saying that his administration would keep working with the banking industry to lessen the impact of the current economic conditions on the State’s citizens.
The governor reiterated his government’s commitment to the welfare of the people, noting that over the last seven and a half years, it has implemented a number of policies and programmes to reposition the State as a leading sub-national in terms of GDP growth.
“We have established institutions, equipped our people with skills, and made sure they are gainfully employed,” he declared. “Seven years later, we are among the top States in Nigeria in terms of GDP growth.”
“I’m here to express our gratitude for working with us over the past seven years to expand Edo State’s economy. You have helped me get this far with your support.
“I thank each bank and management for taking advantage of the opportunities created in the last seven years, especially with our reforms and growth.
“In the last seven years, we have improved our security, ensuring our people walk freely as the ability to restore security gives confidence to our people who come back home to invest in our State.”
