LCCI supports CBN’s interest rates retention, demands fiscal incentives

The Lagos Chamber of Commerce and Industry (LCCI) endorsed the decision of the Central Bank of Nigeria (CBN)’s Monetary Policy Committee (MPC) members’ unanimous decision to retain all the key monetary rates, describing the decision as desirable for the economy in view of the current Coronavirus-triggered challenges.

The CBN Governor, Godwin Emefiele, had, at the end of the MPC’s two-day meeting in Abuja on Tuesday, announced the retention of the rates by unanimous decisions of committee’s members.

Specifically, the apex bank left the Monetary Policy Rate (MPR) unchanged at 13.5 percent; the Cash Reserve Ratio (CRR) at 22.5 percent; Liquidity Ratio at 30 percent and the Asymmetric Corridor rate around the MPR at +200/-500 basis points.

Reacting to the MPC’s monetary policy decisions in a live television broadcast on Channels Television, LCCI Director General, Mr. Muda Yusuf, said the committee’s decisions could not have been different in view of the far-reaching disruptions of the global economic landscape, the impacts of which are seriously being felt across the broad spectrum of the nation’s economy, particularly the real and trade sectors.

“From what we have witnessed since the last meeting of the committee, I was not expecting the committee to change the monetary rates, given the problems the coronavirus has triggered in the economy over the past few weeks. So, I think the decisions were in line with our current economic realities”, the Director General said. On how the devastating impact of the pandemic could be mitigated and by so doing ensure some growth in the economy, Yusuf, who lauded the interventions by the apex bank so far to stimulate economic activities in the economy, charged the fiscal authorities to complement the CBN’s monetary interventions by supporting critical sectors like Trade and Health with some fiscal stimulus, including tax rebates.

According to him, the government can help to reduce the negative impact of the current economic crisis associated with the COVID-19 by critically appraising the problems of export-oriented and backward-integrated businesses, and supporting them with appropriate fiscal incentives in view of the foreign exchange and other benefits to the economy.

“Government should complement the CBN’s monetary initiatives with fiscal measures such that export-oriented and backward integration-oriented companies can do better. We have not seen much of alignment of monetary and fiscal policies in recent times. “This demands that the Federal Ministry of Finance, being the custodian of the fiscal policies, should think on how to stimulate real sector growth through tax rebates and other incentives.