The National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dele Kelvin Oye Esq., has called for an urgent paradigm shift in the nation’s monetary policies to stabilize the economy and drive sustainable economic growth and development.
Oye made the call in a statement in response to the recent economic data released by the National Bureau of Statistics (NBS).
According to Oye, “It has become imperative to address the prevailing concerns regarding the Central Bank of Nigeria’s (CBN) monetary policies and the lack of a published 2024 fiscal policy framework by the Federal Ministry of Finance.”
He noted that “despite the reported GDP growth of 2.98 percent in the first quarter of 2024, it is evident that the high interest rate is not translating into tangible economic benefits for ordinary Nigerians, farmers, SMEs and large businesses who report lower investment and increased devaluation induced losses.”
The NACCIMA boss stated, “The services sector’s notable growth is principally driven by phenomenal profits gifted to banks by these policies.
“The slight improvements in agriculture must be adjusted for recovery from the significant losses in preceding years.
“The industry sectors are boosted by investment decisions in the preceding years but now overshadowed and at risk of challenges posed by stubborn inflation, currency instability and high interest rates.”
Oye said the persistent depreciation of the naira, combined with the CBN’s refusal to collaborate meaningfully with the currency market operators, has exacerbated the economic difficulties faced by businesses and ordinary Nigerians.
He advised, “The CBN must accept that 35 percent interest rates offered by commercial banks, makes it virtually impossible for businesses to access much-needed capital.
“This situation starkly contrasts with Mr. President’s 8th Point Agenda, which emphasizes access to capital for businesses, particularly SMEs, at single-digit interest rates through the Bank of Industry.”
“This begs the question; who is the target of these high interest rates? Who is responsible for excess liquidity injections into the financial system? Who is responsible for printing trillions of excess naira for the last 24 months? Who is responsible for over 1.3 trillion naira FAAC injection every month?” Oye queried.
“The answer lies entirely on the lap of both the CBN and the Federal Ministry of Finance. They have the power to control or switch off the taps at will,” he said.
According to him, “The current monetary policies of mopping up excess liquidity are ingenious and impractical. The private sector must be held blameless and relieved of this unnecessary suffering.”
Oye said the misguided monetary policies have resulted in several detrimental outcomes which include:
“Hyper-Inflation: Eroding purchasing power of consumers leads to higher unsold inventory. Eroding SME capital leads to lower SME investment which is a major driver of this economy.
“Access to Capital: The high interest rates imposed by commercial banks have rendered loans unaffordable, stifling business growth and innovation.
“Foreign Exchange Losses: The ongoing depreciation of the Naira has led to significant foreign currency losses, further destabilizing businesses engaged in international trade.
“Business Closures: The unfavorable economic environment has forced many businesses to close or exit the market, resulting in job losses and reduced economic activity.”
The NACCIMA boss further stated, “It is clear that the CBN’s current approach has been a resounding failure. The insistence on an imperial, know-it-all stance, devoid of stakeholder engagement and collaboration, has only deepened the economic crisis. The time to change tactics is now.
“Clearly private entreaties to CBN have failed, so we have to publicly engage now before it is too late.”
He advised, “As concerned stakeholders, we hereby call on the CBN to: “Engage Stakeholders: Involve all relevant stakeholders, including currency market operators, business leaders, and economic experts, to develop inclusive and effective monetary policies.
“Stabilize the Naira: Implement measures on the public expenditure side to stabilize the Naira, thereby reducing foreign exchange losses and restoring confidence in the economy.
“Rein in Inflation: Adopt policies that directly address the root causes of hyper-inflation on the public sector side to ensure that price stability is achieved.
“Facilitate Access to Capital: Work in alignment with Mr. President’s agenda by ensuring that businesses, particularly SMEs, can access loans at reasonable interest rates.”
“The CBN must recognize that the current path is unsustainable. It is time for a profound shift in strategy, one that prioritizes economic stability, growth, and the well-being of all Nigerians.
“We urge the CBN to abandon its unilateral approach and embrace a collaborative, transparent, and pragmatic approach to monetary policy. Only then can Nigeria’s economy recover and thrive once more,” he charged.
