Rising concerns over high interest rates, which hover around 28 and 29 per cent, have prompted the Senate to invite officials of the Central Bank of Nigeria, CBN, and chief executive officers, CEOs, of banks.
Bukola Saraki, Senate president, speaking to journalists in Ilorin at the weekend, said the Senate was concerned about the high interest rates on loans, and that it would discuss the issue with the CBN and the Deposit Money Banks, DBNs, this week.
According to Saraki, it was immoral for certain sectors to be making astronomical profits in an economy where workers were being retrenched and people were losing investments. “They (banks) will tell you that they are doing business but in doing business, there must be social responsibility. We must be able to sit down and look at ourselves eyeball to eyeball, and we intend to do that; and I can promise Nigerians that we can find a solution. Hopefully with the stability in the forex market, we will now begin to address the high interest rate. There is no business that can make money if it is trying to borrow at 28 or 29 per cent. It cannot work and if we cannot get the banks to lend to the real sector and they carry on their money to government instruments, there cannot be growth. So, we must tackle that. I can assure you that I will lead that challenge. We must sit down and discuss it,” intoned the Senate president.
He added that the banks were in business to make money but, “we must look at what money is reasonable in this kind of environment. You may have to reduce that profitability to allow your country to grow. It is that balancing that we need, but in doing that, there must be some incentives. We may have to tell them, ‘Listen, we may have to limit how much you put in government security’. What do you do with that extra amount of money? It must go to the real sector. It must go to the business that produce made-in-Nigeria products. They may say that it is too risky to do that. In doing that, we must give them some assistance. This is the kind of negotiation we must make.”
Hence Saraki said the Senate would discuss with the CBN and the banks on how to address the high interest rate regime. He urged Nigerians to patronise homemade products, adding that people should report any Ministry, Department and Agency that flouted the Senate’s directive that indigenous companies producing such commodities should be given the option of first refusal during public procurement.