Business
Lecturer Endorses MPR Increase
A Professor of Economics, Willy Okowa, has endorsed the recent move by the Monetary Policy Committee (MPC) to hike the interest rate, saying that it will lead to the reduction of the pressure on naira.
Okowa, who is of the University of Port Harcourt said the changes made were geared towards the reduction in money supply which should ultimately bring down the inflation rate.
“The changes are made to reduce money supply. A reduction in money supply should bring down the rate of inflation; reduce the pressure on the Naira, and improve our exchange rate,” he said.
He explained that the move would strengthen the naira such that imported items could be got at a cheaper rate, leading to the prices of goods dropping drastically.
It would be recalled that MPC in its extraordinary meeting on October 10 had raised the monetary policy rate by 275 basis points from 9.25 per cent to 12 per cent and had maintained the current symmetric corridor of +/-200 basis points around the MPR.
Also, the cash reserve ratio was raised from 4 to 8 per cent while the net open position was reduced to 1 per cent from 5 per cent of shareholders funds with immediate effect.
Meanwhile, some analysts have said the country needs to create a medium and long term exchange rate policy to strengthen the naira.
According to them, the monetary and fiscal authorities should determine the factors that would influence the exchange rate and develop short, medium and longer term strategies to support the naira.
The medium to long term target should be able to have a net foreign exchange surplus which could only be achieved through increased exports and minimal imports, they said.
They advised that, “economic manager should focus on expanding the productive and export base of the country by reforming, liberalising and providing infrastructure for the other sectors with potential for foreign exchange earnings: the reforms must be carried but with minimal disruptions of economic activities and without stifling growth.”
Vivian-Peace Nwinaene
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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