Hike in interest rate hurting economy, ICSAN tells CBN

The Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) has called on the federal government to look beyond the “orthodox method” of increasing interest rates in a bid to curb inflation to proffer viable solutions while taking cognizance of the peculiarities of Nigeria’s economic situation. This call was made by the ICSAN President, Mrs […]

The Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) has called on the federal government to look beyond the “orthodox method” of increasing interest rates in a bid to curb inflation to proffer viable solutions while taking cognizance of the peculiarities of Nigeria’s economic situation.

This call was made by the ICSAN President, Mrs Funmilayo Ekundayo in Lagos.

According to her, the Central Bank of Nigeria (CBN) has overtime tried to control inflation by increasing the general interest rate, which ordinarily should have an impact in reducing the inflation rate of the country. However, it has not had any impact on inflation.

She said, “There are so many areas that the government can look into to make the economy more efficient. There is a need to look into real investment in infrastructure. For instance, the government should also try to reduce leakages in the system and the cost of governance, all of these also have a direct impact on growth and the ability of the government to invest.

“The CBN should also make economic policies, taking cognizance of our own peculiarities, the peculiarities of our economic situation and what would work for us. The generally believed notion is that when you increase interest rate, this will incentivize savings and reduce spending which will also lead to a reduction in inflation. However, we have seen it working against us.”