The Lagos Chamber of Commerce and Industry (LCCI) has urged the federal government and the Central Bank of Nigeria (CBN) to provide Micro, Small, and Medium Enterprises (MSMEs) with accessible credit at reduced rates to bolster their operations.
Dr. Chinyere Almona, Director General of LCCI, emphasized the need for lower interest rates than the prevailing CBN Monetary Policy Rate (MPR), highlighting the difficulty MSMEs face in accessing credit due to high lending rates.
The chamber expressed concern over the recent 400 basis points hike in the benchmark lending rate by the CBN to 22.75%, describing it as an aggressive regulatory move amid challenges like inflation, commodity price hikes, and the FOREX crisis.
While acknowledging the CBN’s aim to control inflation, LCCI questioned the effectiveness of consecutive rate hikes in curbing rising food inflation and its impact on businesses and economic growth.
Noting the significant shift in monetary policy signaled by the latest MPR increase, LCCI stressed the need for a combined fiscal and monetary approach to combat inflation, citing a notable rise in the headline inflation rate to 29.90% in January 2024.
The chamber advocated for addressing supply-side deficiencies and continuing FOREX market reforms to tackle the high exchange rate against the naira, a major contributor to inflation. Additionally, it recommended fiscal interventions such as subsidies for key sectors like agriculture, transport, and healthcare, alongside investments in agro-industrial hubs to stimulate local manufacturing.
