Manufacturers Association of Nigeria (MAN) has warned that the interest rate pegged at 11% recently by the Central Bank of Nigeria (CBN) remains high and not sustainable for the members of the Organised Private Sector (OPS).
President of MAN, Dr. Franks Jacob, at an annual briefing in Lagos, noted that no local manufacturer can be able to survive with any loan above single digit interest rate in the face of the economic challenges in the country.
“For us the only interest rate that can be sustainable is 3 to 5 percent, as anything higher than that cannot work for manufacturers”, he said.
Jacob said the high rate of interest on loans from the banks is one of the reasons MAN has been kicking against Nigeria opening up its border to European Union Economic Partnership Agreement and others.
According to him, local manufacturers contend against several challenges from electricity, infrastructure and low technology, which are not burdens to the developed world.
“Cost of production out there is less, so if we open our border to them, it is like killing our local industries. But if we can get loan at a lower rate, then we will be able to compete favourably.”
Jacob, who, however, commended the CBN action restricting operators of Bureaux de Change (BDCs) to sourcing their funds from the autonomous market revealed that the apex bank was actually heeding to the advice of the OPS.
