The Organised Private Sector, OPS, in Nigeria has advocated for enhanced credit flow to the economy to drive growth especially in the manufacturing sector.
The call becomes imperative as the Monetary Policy Committee of the Central Bank of Nigeria, CBN, retained interest rate at 11.5 per cent following low consumer spending.
The decision was announced on Tuesday by the Banks Governor Godwin Emefiele, during the 278th meeting in Abuja.
The CBN retained it unconventional monetary policy despite the worsening inflation which rose to 17.33 per cent in February 2021, from the 16.43 per cent in January and also retained interest rate at 11.5 per cent following low consumer spending during the 277th meeting.
But it its reaction, the Lagos Chamber of Commerce and Industry, LCCI, expressed the belief that sustained intervention efforts of the Bank would further enhance credit flows to the real economy, stimulate output growth and ultimately moderate inflationary pressures.
Director General of the Chamber, Muda Yusuf, in reaction to the MPC retention of lending rate at 11.5 per cent with unemployment rate at a record high of 33.3 per cent and weak employment levels in manufacturing and services sector, tightening monetary policy stance would stifle access to credit, and undermine the pro-growth agenda of the CBN.
In September 2020, the authorities unexpectedly cut the monetary policy rate by 100 basis points to 11.5 per cent from the previously held rate which was 12.5 per cent.
Emefiele noted inflationary pressure would moderate in the short to medium terms following successful administration of the Covid-19 vaccines.
He said the Committee was faced with tough decisions of moderating the rising inflation and stimulate output growth.