Base Lending Rate will trigger higher cost of products – Manufacturers
The Manufacturers Association of Nigeria has warned that the recent increase in base lending rate by the Monetary Policy Committee of the Central Bank of Nigeria will trigger higher prices of products.
In a statement titled, “The preliminary position of MAN on the July 19, 2022 decision of the Monetary Policy Committee of the central bank of Nigeria,” the group said several other negative effects abound.
MAN stated that it would also bring about another level of increase in interest rates on loanable funds, which would upscale the intensity of the crowding-out effect on the private sector businesses as firms had lesser access to funds in the credit market.
According to the statement, the rate hike, would “intensify demand crunch emanating from the heavily eroded disposable income of Nigerians, constraining access of households and individuals to cheap funds.”
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According to the statement, the situation would also “lead to rising cost of manufacturing inputs, which will naturally translate to higher prices of goods, low sales and enormous volume of inventory of unsold products.”
The statement further read, “MAN is therefore concerned about the ripple effects of this decision and its implications for the manufacturing sector that is visibly struggling to survive the numerous strangulating fiscal and monetary policy measures and reforms.”
PR/Punch/Hauwa Abu
