The Manufacturers Association of Nigeria (MAN) has called on the Federal Government to adopt a single digit interest rate window as it will encourage manufacturers and other business entrepreneurs to access loans for investment, which will stimulate aggregate demand.
Mr Wale Adegbite, Chairman, MAN, Ogun Branh, who made this call earlier in the week urged the Central Bank of Nigeria (CBN) to create a window that would grant single digit interest rate to the real sector.
Adegbite said the MPC under the Central Bank of Nigeria (CBN) had no choice than to retain the Monetary Policy Rate (MPR) at 14 percent because of the prevalent higher Inflation rate in the country.
He said; “We are calling on the CBN to provide a platform that would grant single digit interest rate as part of the palliative measures to reduce the effects of rising inflation rate on the manufacturers.’’
He said that there is the need for the CBN to improve the capacity of developmental financial institutions such as the Bank of Industry, for manufacturers to have easy access to single digit interest rate, stressing that manufacturers should have access to better interest rate like the one granted to agriculture sector for the manufacturers to thrive and produce at optimal capacity.
Recall that Adegbite, during a recent 9th business luncheon of the Ogun MAN in Ota, noted that the economy was in distress due to the fall in the price of crude oil.
He pointed out that recession challenges had resulted in a number of factories producing much below installed capacity, while others had closed down, stressing that that the scarcity of foreign exchange had affected every facet of the economy.
He added that in spite of the intervention of the Central Bank of Nigeria, the manufacturing sector was still facing enormous challenges.
In his presentation, Engineer Reginald Odiah, MD/CEO, Bennet Industries Ltd, stated that manufacturers should cut down on the cost of production, advising that recessionary period requires cutting down cost of production.
Odiah urged his colleagues in manufacturers sector to consider repackaging their products, maintaining that products could be reduced in size, but must remain at the same price.
He called on fellow manufacturers to invest more on training and research and development, adding that innovation would lead to creating new products, which is part of solutions to the current recession menace.
He said; “Seek opportunities to optimise idle assets like land, private properties, vehicles, machineries can be leased to others or sold when the use is not optimised. Reduce investment on low margin products. Reduce logistics cost, like transportation, warehousing, via strategic procurement covering sourcing and delivery.”