High interest rate dangerous for economy —el-Rufai

KADUNA State governor, Mallam Nasir el-Rufai, on Wednesday, said prevailing interest rate regime has led to massive job losses in the country.

According to him, with benchmark interest rate at 14 per cent, only illegal businesses could thrive in the country.

Speaking in a keynote address at a special edition of roundtable organised by Women in Business, in Abuja, el-Rufai threatened that CBN risked losing its power to set lending rates for commercial banks unless it immediately addressed the situation, adding that only unscrupulous elements could successfully operate under the current fiscal policy atmosphere.

“We have a Central Bank that has an MPR at 14 per cent and banks lending at 20 per cent. Only traders and drug dealers can make money at this interest rate.

“I have said it before and I will repeat it again, unless the Central Bank and the banking system make a conscious decision to bring interest rate down, one day, we would legislate it,” el-Rufai said.

He debunked the notion that high interest rate was panacea for high inflation.

“The rate of inflation in the United Kingdom is not two per cent or one per cent. It is seven to eight per cent. But lending rate is at what one per cent. I think they cut the interest rate last week.

“All these theories that the rate of interest must be above the rate of inflation is economic [expletive],” el-Rufai said.

“We must decide that businesses should be able to borrow at the rate interest that makes sense and politically lower rates to that level,” he added.

The Women in Business roundtable attracted professionals from all walks of life and the participants used the platform to share viable ideas and express challenges faced in running a successful enterprise.