Mr. Godwin Obaseki, the Governor of Edo State, has condemned the Central Bank of Nigeria’s recent move to increase the interest rate to 22.75 percent, describing it as harmful to the nation’s economy. 

Speaking at the annual Edo Zone Bankers’ Committee Dinner in Benin, Obaseki voiced apprehensions about the potential adverse effects of the CBN’s decision on businesses and the broader economy. 

He linked the anticipated challenges ahead to what he perceives as unfavorable economic policies enacted by both the federal government and the CBN.

“The next few months will be difficult because the policies rolled out by CBN will unfortunately not support growth in our economy. The interest rate is already high and jacking it up will not allow small businesses access to credit to make them grow,”

The CBN’s Monetary Policy Committee (MPC) had recently announced a significant increase in the Monetary Policy Rate (MPR) by four hundred basis points, from 18.75 percent to 22.75 percent.

Obaseki underscored that the Central Bank of Nigeria’s chosen policies would impede economic growth, especially by restricting small businesses’ access to credit. He called for a shift towards policies prioritizing heightened production and reduced reliance on imports, emphasizing the significance of concentrating on productive activities beyond mere exchange rates.

The governor voiced worries about the possible adverse consequences of raising cash reserves on the economy, proposing an emphasis on fiscal measures to stimulate economic growth instead. 

Additionally, Obaseki encouraged commercial banks to innovate and introduce products and services designed to alleviate the economic hardships faced by a majority of citizens nationwide.