Professor Ndubisi Nwokoma, a renowned expert in financial economics and Director of the Centre for Economic Policy Analysis and Research at the University of Lagos, has urged the Nigerian government to reduce the cost of governance and address fiscal issues.
During an interview with ARISE NEWS on Wednesday, he highlighted the severe challenges faced by manufacturers in Nigeria’s business climate. He pointed out critical issues affecting manufacturers’ success, including infrastructure deficiencies, energy instability, market policy uncertainty, and barriers to foreign capital inflow.
Nwokoma stressed that these factors significantly contribute to current inflationary pressures in the country. He called on the government to urgently tackle these challenges to create a more conducive environment for businesses.
Nwokoma stated, “I completely agree with manufacturers about the business climate; it’s not conducive at all. The government should focus on these areas. The business environment is unfavourable; the government needs to critically assess it. The interest rate is linked to the inflation rate; if inflation is higher than the interest rate, it becomes problematic.”
He further explained, “We need to consider production issues. Raising interest rates without considering other economic fundamentals causes problems. Nigeria’s unstable system hampers productivity; instability and insecurity lead to inflation because there is no production.”
Nwokoma also highlighted the disparity in interest rates compared to other countries, saying, “In Nigeria, interest rates are high. I assume the central bank raised rates to nearly 27% at the last MPC meeting to combat inflation and attract foreign capital.”
He concluded by calling for fiscal responsibility, stating, “We must direct funds towards economic growth. The government should cut governance costs, address fiscal issues like expenditure and oil theft, and improve the agricultural environment. These steps can reduce business costs and subsequently lower interest rates.”
NNEOMA UDENSI
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