Analyst berates government’s role in business
For the nation’s economy to rebound, the General Secretary, Association of stockbroking houses of Nigeria (ASHON), Mr. Akinsola Akeredolu-Ale, has said government does not have any business in running the economy but to provide enabling environment for businesses to thrive.
According to him, what the government should be doing instead, is to continuously relinquish affairs of the economy to the capital market, the money market and to the experts to run, and empower them, rather than focus on playing more roles which will end up stifling the private sector.
“Government by a way of double digit interest rate still controls the finance industry on the one hand. As long as Federal government continues to issue bond at 13 per cent to 14 per cent, they are effectively giving money and collecting the funds back from the public.”
“The Monetary Policy Rate (MPR) is supposed to regulate economy in such a way that commerce should grow. The day CBN decides to reduce MPR to about nine per cent; you will see investors rushing back into the capital market, then the equities market will grow.
“When the MPR rate is at 13 per cent – 14 per cent, the nation’s capital market will not grow.” he said.
On this, the Central Bank of Nigeria 251stMonetary Policy Committee meeting commences from today and experts expressed that CBN might introduce new policy to tackle inflation rate and scarcity of foreign exchange.
The National Bureau of Statistics (NBS) in its recent report disclosed that the nation’s inflation rate hits 11-year record high of 16.5 per cent.
CBN at the last MPC meeting had retained the MPR at 12 per cent; Cash Reserve Ratio (CRR) at 22.50 per cent and liquidity ratio at 30.00 per cent.
