By NAOMI UZOR

Lagos Chamber of Commerce and Industry, LCCI, has said that a single digit interest rate is the key to Nigeria’s private sector’s productivity and competitiveness in the regional and global market.

LCCI noted that all over the world the current interest rates set by their respective central banks range from 1 percent in Canada to 0.5 percent in England; in Japan it is 0.1 percent ,China 6 percent, India 8 percent; Indonesia 7.5 percent Switzerland 0.00 percent.  In African countries such as Egypt interest rate is 8.75 percent, South Africa 5.5 percent while in Nigeria it hovers between 25-35 percent.

The President of LCCI, Alhaji Remi Bello, told Vanguard that a situation in which investors in the Nigerian economy is borrowing at 25-35 per cent per annum ,is unbearable and not in the best interest of the economy and does not help the productivity and competitiveness of the private sector and the advancement of the economy as a whole.

He said that the chamber has therefore called on the Central Bank of Nigeria (CBN) to urgently and critically examine the problem of high cost of funds and Monetary Policy Tightening.

Bello noted that the continuation of a tight monetary regime will perpetuate persistent high interest rates and this undermines the capacity of enterprises to create jobs and the capacity of banks to support the economy would remain inhibited.

”Economic policies are not ends in themselves, but a means to an end!  The ultimate aim of any economic policy is to positively impact the lives of the people.

The fiscal authorities also have a critical role to play in revamping the economy; but regrettably, the effectiveness of fiscal policy has been weakened by corruption and inadequate institutional capacity,” he said.

“The cost and access to credit by the small businesses remains a major problem in the economy.  This group pays as high as 70 to 100 per cent interest rate per annum on loans.