The National President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), Hon. Dele Kelvin Oye, has described the prevailing high interest rates in Nigeria as a reflection of a central banking system that is disconnected from businesses’ needs.
Oye stated this last week in the keynote address titled “Economic Growth and Development Strategies for a Resource-Rich Country,” which he delivered in Yenagoa, Bayelsa State, during the “All Nigerian Editors’ Conference 2024,” where he stated that the current structure of the Nigerian government and rewards accruable to political office holders seemed to portray that wealth is often derived from holding governmental offices than productive enterprises.
He said: “High interest rates – peaking at 35-40 per cent – reflect a central banking system that appears disconnected from the needs of its populace and businesses.
“The Nigeria 10-year Government Bond Yield reached an all-time high of 21.25 per cent in August 2024.
“The central bank’s high-interest regime, coupled with bond yields exceeding 20 per cent, has led local banks to prefer investing in bonds rather than supporting businesses.
“This trend discourages entrepreneurship and diminishes economic growth, as evidenced by Zenith Bank’s reported one trillion-naira profit in Q3 2024, mirroring profits seen across other banks, without commensurate lending to businesses or support for industrial growth.”
Oye also alleged that poor management of Nigeria’s foreign exchange market has seen the value of the Naira depreciate from N460.70 in May 2023 to around N1,735 per dollar on November 7, 2024.
According to him, the laissez-faire approach to exchange rate management has left businesses vulnerable to a rapidly fluctuating and depreciating naira.
He pointed out that “the absence of transparent, stable exchange policies that can enhance the value of the Naira, has been a significant contributor to hunger and economic distress among our people.”
Besides monetary policy, Oye further alleged that the absence of clear fiscal policies as businesses approach the end of 2024 financial year had been stifling business planning and investment decision, which compelled them “to operate amid a fog of uncertainty, hampering growth and innovation.”
He said: “This lack of clarity means that companies merely react to new policies, leading many to relocate to more organised countries.”
Commenting on the structure of government, Oye lamented that the judiciary, the legislature, and the executive are increasingly becoming too costly for the Nigerian economy to sustain.
His words: “The current framework is designed in a way that favours the political elite over the working class, making it challenging for production to thrive.
“In developing countries like ours, it seems that wealth is often derived from holding governmental offices rather than from productive enterprises.
“I propose that our elected officials, particularly in the legislative arm, should serve in a part-time capacity, funded solely by their constituents or state governments.”
He added that the current tax system favours political elites over the productive sectors of the economy and urged the government to ensure that tax revenues should translate into robust investments for infrastructure and community development instead of inflating governmental expenditures through the monthly Federal Accounts Allocation Committee (FAAC) distributions, which often leave taxpayers with little to show for their contributions.
In addition, Oye admonished governments to be wary of over-taxation as no state will tax its citizens beyond their ability to pay and still expect to the economy to grow.
He also cautioned President Bola Ahmed Tinubu’s administration against indulging in blame game, in collaboration with the World Bank, that attribute the negative impacts of its policies to its predecessors because it would complicate the country’s economic recovery efforts.
Oye said: “While it is essential to understand the historical context of our current situation, the government must also take responsibility for its present and future policies.”
The national president of NACCIMA, therefore, urged the editors that the role of the media has become crucial in this environment of significant mismanagement and major national challenges.
“The Nigerian Guild of Editors (NGE) must assume a proactive stance in holding government and corporate entities accountable for their actions. By ensuring transparency and advocating the public good, the media can help revive public trust in our institutions.
“As members of the guild, you embody the theoretical checks on government and society, helping to shield our people from poor policies, corruption, and the abuse of power.
“The future is in our hands. And together, let us write the next chapter of Nigeria’s story as one defined by transparency, accountability, and transformative growth,” Oye said.
Dike Onwuamaeze
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