The Securities and Exchange Commission and the National Pension Commission have approved “a new instrument that will allow pension funds to invest in infrastructure bonds,” the Minister of Finance, Mrs. Kemi Adeosun, said at a meeting of business leaders in Abuja .
“That’s what will drive, for example, our social housing and our roads programme outside the budget,” she added.
Adeosun also called on the Central Bank of Nigeria to lower interest rate so that the government could borrow domestically to boost the economy.
Renowned economist and Chief Executive Officer, Financial Derivatives Limited, Mr. Bismarck Rewane, said in a telephone interview that he and other experts had before now stressed the need to reduce the interest rate.
He said, “There is no other way but to reduce the interest rate. During recession, Britain brought down interest rate; and in the US during the recession, what did they do? They brought down interest rate as well. So, we need to bring down the interest rate.”
The Director-General, West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, who lent his voice to the call for a cut in interest rate.
He said, “That is the only way to fast-track the recovery of the economy. The interest rate must be reduced to close to single digit, if not single digit, in order to stimulate the real sector. Now, it is an average of 25 per cent and that is too high.
“The real sector is dead now; when you are in a recession and the real sector is dead, then the recession will last for long.”
Ekpo said the Monetary Policy Rate, which is the benchmark interest rate, should be reduced to 10 per cent from the current 14 per cent so that the lending rate would be around 13 to 14 per cent.
The Monetary Policy Committee of the CBN had at the end of its meeting in September kept the MPR at 14 per cent .