The Lagos Chamber of Commerce and Industry (LCCI) has issued a pressing call to the federal government and the Central Bank of Nigeria (CBN) to ensure the availability of credit for Micro, Small, and Medium Enterprises (MSMEs) at concessionary rates. This appeal comes as a vital measure to bolster the operations and production capabilities of these vital economic players.
In a recent official statement from LCCI concerning the Monetary Policy Committee’s Decisions on the Monetary Policy Rate (MPR), the Director General of LCCI, Dr. Chinyere Almona, emphasized the urgent need for concessional lending rates tailored specifically for MSMEs. Almona highlighted the formidable challenge posed by high lending rates, particularly for MSMEs, which serve as the backbone of Nigeria’s economy.
She expressed concerns that elevated production costs, driven by exorbitant lending rates, could result in increased prices for goods and services, potentially eroding the competitiveness of Nigerian products in both African and global markets.
Regarding the recent decision by the CBN to raise the benchmark lending rate by 400 basis points to 22.75 percent, the LCCI characterized it as an aggressive regulatory intervention. The chamber acknowledged the challenging economic environment characterized by inflationary pressures, commodity price fluctuations, a forex crisis, and escalating production costs.
While acknowledging the CBN’s efforts to control inflation, the LCCI raised apprehensions about the effectiveness of the decision, especially considering its potential impact on businesses and economic growth amidst the current economic challenges.
The LCCI observed that the latest increase in the Monetary Policy Rate (MPR) signifies a significant shift in monetary policy and stressed the importance of a holistic approach combining fiscal and monetary policies to effectively address rising inflation rates.
In light of the persistently high inflation rates, the LCCI underscored the imperative for both monetary and fiscal authorities to prioritize addressing supply-side deficiencies rather than solely focusing on demand-side management.
In addition, the LCCI urged the CBN to persist with forex market reforms to stabilize the exchange rate, a crucial factor contributing to inflationary pressures. On the fiscal front, the government was urged to subsidize key productive sectors such as agriculture, transport, and healthcare while enhancing security measures. Additionally, the LCCI recommended adopting a more affordable duty rate for importing agricultural inputs to support local manufacturing and investing in agro-industrial hubs nationwide.
