The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced that the federal government is extending credit facilities of up to N1 billion to large enterprises, including manufacturers, at a 9% interest rate.
Edun disclosed this during an interview on Channel TV on Sunday regarding the state of the economy.
He emphasized that both large and small-scale businesses can access the loan at a maximum interest rate of 9%.
Small-scale businesses can secure loans of up to N1 million, while large industries are eligible for as much as N1 billion, all at the same modest interest rate.
“Our focus is on accelerating the speed and scale of assistance available. We offer loans at 9% for medium-scale enterprises up to N1 million and up to N1 billion for larger enterprises, enabling manufacturing firms to invest, expand the economy, create jobs, and increase production to alleviate inflation.
“We collaborated with the private sector, the Manufacturer Association, governors, and other stakeholders to develop an economic stabilization plan and announced measures,” Edun stated.
On CBN’s High-Interest Rate
Addressing the Central Bank’s increase in interest rates, Edun observed that the apex bank’s stance is effectively combating inflation.
He noted that the inflation rate has gradually decreased each quarter this year compared to last year.
Edun stressed the importance of remaining steadfast in reducing inflation and stabilizing prices of goods and services.
“The monetary authorities seldom prioritize fighting inflation and reducing overall prices. We’ve seen steady growth quarter by quarter, about 2.9% above population growth. The economy is moving in the right direction.
“We must stay the course and ensure assistance is provided across all sectors,” Edun added.
Key Points to Note
Last May, the CBN raised the monetary policy rate by 150 basis points to 26.25% from 24.75%.
Many business owners and stakeholders express concerns that the apex bank’s hawkish stance could negatively impact the economy, particularly by hindering access to loans.
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) warns that the policy might inadvertently fuel inflation, with businesses potentially raising prices to offset higher borrowing costs.
Critics argue that the rate hike is counterproductive and won’t address the country’s money supply challenges.
