Don Seeks Review Of Interest Rates

Former Dean, Faculty of Management Sciences, Rivers State University (RSU), Port Harcourt, Prof. Adolphus Joseph Toby has again flayed the high interest rate on manufacturing and investment, asking the Federal Government to consider a downward review of interest rates to boost domestic investment and the real sector.
Speaking with The Tide, yesterday in Port Harcourt in an interview on the development of the real sector, Toby said that a critical thing that every manufacturer wants the government to do is to crash the interest rate window.
He decried that the monetary authorities do not fully appreciate the impact of high rate of interest on investors, pointing out that it is difficult to boost domestic investment with the current interest rates, especially in the real sector.
According to him, “the nation is in need of both domestic and foreign direct investments to turn around the economy, and this will not happen if government perpetuates high interest rates”, he said.
The erudite professor of corporate finance, argued further that most businesses that ended up with Asset Management Corporation of Nigeria in recent times were victims of high interest rate, as it is a contributory factor to the rising level of non-performing loans in the banking system.
As he puts it, “many investors depend largely on bank loans for the acquisition of fixed assets, machineries and working capital. “Time like this demands that we should bother much about growth, jobs and output, than inflation”.
He said that in any occasion, an increase in out put would have a moderating effect on inflation, stressing that, the truth of the matter is that, it is difficult to boost domestic investment with interest rates, especially in the real sector”.
He, however, noted that many of the businesses that ended up with AMCON were victims of high interest rates, saying, “we need the investors to turn things around in the economy”.
Toby, therefore, added that, “this will certainly not happen if we continue to perpetuate a regime of high interest rate. The state is further complicated by the high yield on government debt instruments”.

Bethel Toby