Former President of the Senate, Senator Ahmad Lawan, has said that the high interest rate of 34 percent tied to borrowing by commercial banks is prohibitive for business investments and food production in the country.
According to him, the high interest rate makes it difficult for local businesses and farmers to declare profits and compete favorably with their counterparts in other countries offering much lower interest rates.
Senator Lawan stated this while speaking to journalists after flagging off the distribution of grains and food materials to the vulnerable in his senatorial district of Yobe North.
He explained that the distribution of food items by his foundation – the Senator Ahmad Ibrahim Lawan (SAIL) Foundation – was an intervention to complement the efforts by the Yobe State government to provide relief to the poor and needy during the festive period.
He urged political leaders to find a lasting solution to the nation’s economic and security challenges, adding that bailouts and interventions, such as the distribution of food items, are merely temporary measures that do not address the real problems faced by vulnerable Nigerians.
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He said: “There is a need for those of us who can afford it to help those in dire need. It is no secret that many Nigerians are in a very desperate situation.
“This intervention is to provide some solace and relief, especially during this festive period.
“Our intention is that these food materials should reach those who are distressed and vulnerable due to the economic situation in the country; and while it is not enough, such an intervention can provide some relief for a time.
“However, our desire and wish is to make every Nigerian self-reliant. Bailouts like this, or stopgap arrangements, cannot solve the problems. But before we reach that destination, we must take actions like this.”
Senator Lawan underscored the crucial role played by state governments in complementing those of the federal government in delivering good governance.
He expressed hope that the economic reforms introduced by the President Tinubu administration would yield the desired results in 2025.
“I’m looking forward to a very successful 2025 that sees an end to these economic challenges we face; and that the economic reforms introduced by the federal government would yield the results we expect.
“But governance is beyond the federal government. State governments also have important and crucial roles to play in complementing what the federal government is doing.
“Here in Yobe, the state government has been doing very well. Recently, it distributed food items to the vulnerable.
“Whatever we do here is to complement what the state government is doing, and I’ll advocate that every state do the same, but this is not the solution.”
The former Senate President bemoaned the plight of Nigerian farmers in some northwestern states of the federation, most of whom, he noted, have lost their source of livelihood due to the spate of insecurity.
“We should start thinking about how to get our farmers back to the farms. In some states of the North-West, the bandits have made it difficult, if not impossible, for them to go to the farms. Most of the people are peasants who depend on farming.
“Now that they cannot go to the farms, what else will they do? So, we must as leaders work to get our farmers back to the farms and, not only that, provide the right inputs at the right time to help them achieve the best yields,” he said.
He called on the federal government to immediately intervene in the high interest rates fixed by commercial banks on borrowing, which, according to him, have become prohibitive for business investments and food production in the country.
“We must also do something to make funds for investment accessible. Today, the interest rate is prohibitive; in fact, it is callous. In other countries, they offer half-percent interest rates, but today, in this country, it is probably 34 percent when you go to the bank to borrow.
“How would you invest and compete with farmers from countries that offer half-percent interest rates? We need to do much more.
“But before we reach that destination, we must intervene and support our people,” Senator Lawan said.
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