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, amongst other negative consequences.
MAN stated this 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 this was 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, amongst other biting consequences would “intensify demand crunch emanating from the heavily eroded disposable income of Nigerians, constraining access of households and individuals to cheap funds.”
It said 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.”