NACCIMA sees 13% MPR as antithetical to industrial development

The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has said that the Monetary Policy Rate (MPR), which has been increased from 12 percent to 13 percent, is inimical to Nigeria’s quest for industrial development.
The Central Bank of Nigeria (CBN) recently raised the MPR, which is the benchmark interest rate in the country, to 13 percent to save naira from the negative impact of declining oil prices while also mopping up liquidity from the banks.
But this decision has made funds costlier for manufacturers and SMEs that deal directly with banks.
NACCIMA, which is the umbrella body of all the chambers of commerce in the country, says the rise in the cost of funds will further endanger Nigeria’s ailing industrial sector, stressing that investors are already worried that their businesses are at risk owing to the negative impact of the increase.
It says that the current lending rate, which hovers between 22 percent and 35 percent, is too high for any productive venture and has significant implication on the global competitiveness of Nigerian firms and their products.
In a briefing on the state of the nation in Lagos, prepared by Mohammed Badaru Abubakar, president of the chamber, but read by Bassey Edem, deputy national president, the chamber implores government sincerity in facilitating a private sector led economy to enable Nigeria to maximally utilise her abundant resources and boost non-oil export sector.
It further recommends that government should intensify its transformation agenda on infrastructure to reduce cost of production, unit prices in order to enhance international competitiveness local products.
More so, the chamber enjoins the government to address other areas that effectively raise the cost of doing business, such as excessive tax burden, high cost of compliance with government regulations and extortion/harassment of companies by regulatory agencies.
“Government should examine the various incentives and harmonise them appropriately. The ineffective ones should be abolished while others should be fine-tuned to make them practicable and realistic. In this wise, the abolition of Duty Draw Back Scheme is commendable, and the fine-tuning of the Export Expansion Grant will be a step in the right direction,” NACCIMA says.
On the Common External Tariff (CET), whose implementation will begin in January 2015, the chamber says the regime, which will throw borders open to other West African countries, will present a challenge for Nigeria’s growing industries that are already battling with the negative impact of naira devaluation and other challenges.
“The need to ensure compliance to all protocols signed by ECOWAS to eliminate dumping of goods in the region becomes of great importance if our growing industries are to survive with the implementation of ECOWAS CET and for the realisation of the Nigeria Industrial Revolution Plan,” the chamber says.
It further says the ECOWAS Trade Liberalisation Scheme (ETLS) requires government’s serious commitment in its implementation, as a lot of private sector exporters complain of frustrations encountered with implementing agencies at the borders.