President Bola Tinubu says the current 18.5% interest rate of the Central Bank of Nigeria (CBN) is “too high”.
He spoke on Monday during his inaugural speech as president.
Last week, the apex bank raised the monetary policy rate (MPR) from 18% to 18.5% in an effort to “tame rising inflation”. The MPR is the baseline interest rate in an economy, every other interest rate used within the economy is built on it.
Addressing Nigerians, Tinubu said the interest rate needed to be adjusted downwards to encourage investment. He further described the interest rate as “anti-people” and “anti-business”.
“Monetary policy needs a thorough house cleaning. The Central Bank must work towards a unified exchange rate. This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy. Interest rates need to be reduced to increase investment and consumer purchasing in ways that sustain the economy at a higher level.” Tinubu said.
The president also said his administration will review the naira redesign policy.
“Whatever merits it had in concept, the currency swap was too harshly applied by the CBN given the number of unbanked Nigerians. The policy shall be reviewed. In the meantime, my administration will treat both currencies as legal tender.” He said.
The President also touched on some of his campaign promises like;
AFFORDABLE ELECTRICITY, REDUCTION IN UNEMPLOYMENT
Tinubu said his administration will target a higher gross domestic product (GDP) growth as well as a significant reduction in unemployment.
He said: “We intend to accomplish this by taking the following steps: First, budgetary reform stimulating the economy without engendering inflation will be instituted. Second, industrial policy will utilize the full range of fiscal measures to promote domestic manufacturing and lessen import dependency. Third, electricity will become more accessible and affordable to businesses and homes alike. Power generation should nearly double and transmission and distribution networks improved. We will encourage states to develop local sources as well.”
The president informed local and foreign investors that his administration shall review all their complaints about multiple taxations and various anti-investment inhibitions.
“We shall ensure that investors and foreign businesses repatriate their hard-earned dividends and profits home,” he said.
CREATION OF ONE MILLION TECH JOBS
Tinubu said his administration will create meaningful opportunities for young people.
“We shall honour our campaign commitment of one million new jobs in the digital economy. Our government also shall work with the National Assembly to fashion an omnibus Jobs and Prosperity bill. This bill will give our administration the policy space to embark on labour-intensive infrastructural improvements, encourage light industry and provide improved social services for the poor, elderly and vulnerable.” He added.
FOOD TO BE MADE MORE ABUNDANT YET LESS COSTLY
On agriculture, Tinubu said rural incomes will be secured by commodity exchange boards guaranteeing minimal prices for certain crops and animal products.
He said a nationwide programme for storage and other facilities to reduce spoilage and waste will be undertaken.
“Agricultural hubs will be created throughout the nation to increase production and engage in value-added processing. The livestock sector will be introduced to best modern practices and steps taken to minimize the perennial conflict over land and water resources in this sector. Through these actions, food shall be made more abundant yet less costly. Farmers shall earn more while the average Nigerian pays less.” The President concluded.