The Manufacturers Association of Nigeria (MAN), yesterday pleaded for a rate cut to revive the sector, stressing that the Monetary Policy Rate (MPR) at 14 per cent by the apex bank would retard the sector’s growth.
President Frank Jacobs, president of MAN, told the News Agency of Nigeria (NAN) in Lagos that the 14 per cent MPR would not boost domestic production.
He said maintaining the present rate would prevent manufacturing from coping with the current recession.
Central Bank Governor Godwin Emefiele had announced MPC’s decision to retain the MPR at 14 per cent at the end of its two-day meeting last week.
Apart from retaining the MPR at 14 per cent, the CBN governor said the committee also voted to retain the Cash Reserves Ratio at 22.5 per cent.
“We had thought that reducing the rates would enable banks to reduce percentage of getting loans to inject into the manufacturing sector to reflate the economy.
“However, with the present circumstance, many domestic producers will be struggling to keep their businesses as a going concern and will not make profits.
“As a result of the recession, most manufacturers will want to shed down workers, which will have negative social implication for the country,’’ he said.
The MAN president urged the apex bank to reduce the interest rates in its next monitory policy meeting to ensure growth in the manufacturing sector.
“It is only when rates are brought down that the manufacturers will be able to sustain and expand their businesses, even during recession,’’ he said.
Jacob said with appropriate incentives, the manufacturing sector could cause an economic turnaround for the country.