The Alliance for Democracy (AD) has challenged the Central Bank of Nigeria over the high interest rates on loans in the country.
A statement signed by the party’s National Secretary, Mr. Rafiu Salau, noted that the recent justification by the CBN that the high interest rates was to control inflation in the economy is not acceptable.
The statement read, “Whatever revenue the CBN thinks it is generating for the federal government with 12 per cent interest rate is a peanut compared to what the government will gain if the interest rate was 4 per cent to the bank while the banks give loan to to their customers at 6 per cent.
“The CBN high interest rate is more damaging to the economy than the failure of PHCN in generating enough electricity. Low interest rate will encourage many investors into the electricity industry, and provide more than enough megawatt for the nation. In many nations, generation of electricity is done by the private sector.”
The statement further noted that adjusting the high interest rate in the country is the necessary impetus to job generation.
“The major industries which boost an economy will surface and right jobs for millions of Nigerians will also emerge. Many firms in every industry will create jobs and enhance the human resources. The absence of the industries which are the pillars of any economy has affected the transfer of technology for the empowerment of the nation’s labour force.
“The high interest rate is the cause of the weakness of Naira. The high demand for our foreign exchange brings the value of Naira low because investors prefer to import finished products due to the high cost of production locally as a result of the interest rate,” the statement said.