Lagos – A financial expert, Dr Glenn Prince-Abbi, on Monday said that the Central Bank of Nigeria (CBN) should pursue lower bank lending rates to bring the country out of recession.

Prince-Abbi, the Chief Executive of Espera Global Corporation, told the News Agency of Nigeria (NAN) in Lagos that lower lending rates would boost the country’s productivity and assist in tackling recession.

He said that all businesses would benefit from lower interest rates as this would encourage them to make more investments and expand their production line as a result of lower cost of borrowing.

According to him, lower interest rates will boost output and productivity in tandem to catalyse economic growth in general.

“We cannot be contending with a sickening economic recession, while we are doing nothing to increase producers’ capacity to increase output and their capacity to borrow to enhance their profitability,’’ he said.

Prince-Abbi said that the Monetary Policy Committee of the apex bank must carefully review a number of factors which impinge on economic growth.

He said that the current high lending regime was benefitting bankers, while compromising producers’ capacity to raise capital in a competitive environment to produce.

Prince-Abbi said he disagreed with the CBN Governor’s submission that lower interest rate would worsen the already high inflation.

“The CBN governor is right, but only in textbook sense of it and only in a classic economic situation where there is a healthy economy and production is at a healthy level and consumers’ purchasing power is relatively high.

“This is not the situation in Nigeria right now. The high inflation is caused more by high input cost arising from a chain of factors which get their roots from the exchange rate and Nigeria’s dwindling foreign exchange reserves,’’ he said.

Prince-Abbi said that the nation’s inflation was not caused by the classic example of more money chasing fewer goods.

“Producers’ ability to produce is weak as a result of both high interest rate and the foreign exchange rate considering Nigeria’s import-dependency,’’ he said.

He said that there was the need for pragmatism in addressing the country’s current case.

“We have to walk the tight rope to create a form of balance and stabilisation, hence a downward review of the interest rate would be an essential action that will help make for this balance,’’ Prince-Abbi said.

He said that the apex bank should not continue to insist that lower interest rate would worsen inflation.

Prince-Abbi said that an expansionary monetary policy would lower unemployment, boost private-sector borrowing and consumer spending as well as stimulate economic growth.

Meanwhile, a turnover of 823.55 million shares worth N5.44 billion was achieved by investors in 11,634 deals last week against 2.85 billion shares valued at N7.42 billion traded in 16,065 deals in the previous week.

The Financial Services Industry led the activity chart in volume terms, accounting for 616.99 million shares worth N2.67 billion in 6,142 deals.

The Conglomerates sector followed with 47.74 million shares worth N43.74 million traded in 510 deals.

The third place was occupied by the Consumer Goods sector with turnover of 42.67 million shares valued at N1.74 billion in 2,112 deals.

The NSE All-Share Index lost 633.34 or 2.42 per cent to close at 25,537.54 compared with 26,170.88 achieved in the previous week.

Also, the market capitalization, which opened at N9.009 trillion, lost N218 trillion or 2.42 per cent to close at N8.791 trillion due to price losses.

NAN reports that 10 equities appreciated in price during the review period, lower than 18 equities of the previous week, while 48 stocks depreciated in price higher than 36 in the preceding week.

Forte Oil recorded the highest loss in percentage terms to lead the losers’ chart, shedding 20.89 per cent or N21.83 to close at N82.67 per share.

Transcorp trailed with a loss of 18.60 per cent or 16k to close at 70k, while Flour Mills was down by 14.38 per cent or N2.72 to close at N16.20 per share.

May & Baker led the gainers’ table in percentage terms, growing by 12.94 per cent or 11k to close at 96k per share.

Access Bank followed with a gain of 3.77 per cent or 20k to close at N5.50, while Dangote Sugar appreciated by 3.68 per cent or 23k to close at N6.48 per share