Abuja –  The National Association of Nigerian Traders (NANTS) on Wednesday condemned the increase in the lending rate as announced by the Central Bank of Nigeria (CBN), saying that it would bring hardship.

The Monetary Policy Committee of the Central Bank of Nigeria had on Tuesday increased the lending rate from 12 to 13 per cent and devalued the naira from N155 to N168 to one dollar

The President of the association, Mr Ken Ukoha, said in Abuja that the new interest rate would negatively affect the ability of traders to obtain bank loans.

Ukoha, who also kicked against the devaluation of naira as announced by the apex bank, said the pronouncement had to be deeply looked into and possibly reversed.
He said that the development would eventually lead to inflation and further deepen the economic crisis in the country.

Ukohoa said that the CBN was yet to tell the populace “the real truth’’ behind the adjustments, adding that it contradicted the promise made by CBN governor, Mr Godwin Emefiele when he assumed office.

He said that the governor on assumption of office pledged to reduce the lending rate so as to enhance the growth of the real sector.

“There is confusion here. When he took over the leadership of the apex bank he promised reduction in the lending rate and he is now doing contrary,” Ukoha said.
According to him, the government is working against the growth of Small and Medium Enterprises (SMEs) sub-sector as the engine of economy.

Ukoha said that the way to develop the SMEs was through loans from bank with low interest rates by the banks.

He, however, said it was unfortunate that the increase in the lending rate would slow down the growth of SMEs.

Ukoha said, “the policy will stagnate and stifle the private sector and make situations harder for investors.’’
He said that the continued drop in oil price should provide the government the opportunity to strengthen mechanism that could encourage diversification of the economy.

He said that rather than increase lending rates, the Federal Government should encourage investors and SMEs operators to access loan from the bank through reduced rates.

Ukoha said that the devaluation of the naira would worsen the already high cost of food items in the country. (NAN)