Lagos – Capital market stakeholders on Thursday called for immediate review of the Monetary Policy Rate (MPR) by the Central Bank of Nigeria (CBN) to prevent imminent collapse of the banking industry.

The News Agency of Nigeria (NAN) reports that the stakeholders made the call on the sidelines of a seminar on the 2017 budget organised by the Securities and Exchange Commission (SEC) in Lagos.

Speaking at the event, Mr Johnson Chukwu, the Initiator/Founder, Cowry Assets Management Ltd., said that the banking sector would collapse if the CBN stick to its present monetary policy.

Chukwu urged the apex bank as a matter of urgency to drop the Cash Reserve Requirement (CRR) and the Monetary Policy Rate (MPR) to attract liquidity for lending to minimise the crowding out of the private sector.

“If we continue with this monetary policy, the banking sector will collapse. Money is leaving the banking vault and going to the public sector,’’ he said.

Chukwu said that the problem of high inflation in the country was due to structural defect and not liquidity.

He attributed the high inflation rate to high cost of energy and foreign exchange challenges.

Chukwu said that government should improve ease of doing business to reduce cost of production for private sector to thrive.

He stated that the nation’s infrastructure deficit could not be addressed by the government alone.

According to him, there is the need to revolve a framework that will enable private sector as well as foreign investors to fund infrastructure.

Dr Biodun Adedipe, the Chief Consultant, B. Adedipe, Associates Ltd., said that instability in the foreign exchange market was the major challenge facing the country.

Adedipe said that the flexible exchange rate would not help the country, noting that the apex bank should avoid interfering in the market.

Mr Bayo Rotimi, the Chief Executive Officer, Quest Advisory Services Ltd., said that policy direction, co-ordination and implementation drives investor confidence all over the world.

Rotimi said that government should ensure that it’s proposed economic plan had definite deliverers that would revamp the economy.

He said that government should attach timeline to the economic plan to achieve success, adding that the plan should be reviewed from time to time.

Rotimi called for introduction of significant reforms in tax regime such as tax holidays to attract new listings.

He attributed power sector privatisation failure to lack of financial, technical and managerial capacity of the core investors that emerged.

Rotimi said that government needed to revisit the power sector privatisation programme to ascertain that they met the needed requirements.