Finance minister pushes for rate cut

NIGERIAN Finance Minister Kemi Adeosun said yesterday that she wanted the central bank to lower interest rates so the government could borrow domestically to boost the economy, which is stuck in recession, without increasing its debt-servicing costs. Adeosun said she was working with the debt office, Nigeria’s sovereign wealth fund and the pension industry to issue an infrastructure bond to raise money for road and housing projects, although she did not elaborate. She said she wanted the central bank to reconsider its July interest rate hike, which it implemented to help support the naira and attract foreign investment inflows. The central bank is due to announce its rate decision today. Economists polled by Reuters last week predicted the central bank would keep its key interest rate at 14 percent and reiterate its focus on resuscitating the economy. “We need lower interest rates because when we are borrowing and interest rates go up, it increases our cost of debt service and it reduces the amount of money available to spend on capital projects,” Adeosun said. “The attempt was to manage inflation and the trade off for the economy right now is what is a bigger problem: is it growth or inflation? For me it is growth. I would rather seek growth. We can manage inflation. I think for us, at the moment in the Nigerian economy, growth is the most important thing.” – Reuters