The House of Representatives Committee on National Planning and Economic Development has cautioned the Central Bank of Nigeria (CBN) against the unintended consequences of high interest rates aimed at curbing inflation in the country.
Chairman of the committee, Rep. Gboyega Isiaka (APC-Ogun), stated this on Wednesday in Abuja during a meeting with the Statistician-General of the Federation and Chief Executive Officer of National Bureau of Statistics, Mr. Adeyemi Adeniran.
Nasiru said that the caution became necessary as the CBN holds its 300th Monetary Policy Committee (MPC) meeting next week.
He said there seems to be a majority opinion that the current government has taken bold steps and pursued market-driven reforms that have been yielding results.
Nasiru acknowledged that the policy has yielded great results, as the economy is getting stabilised and confidence being restored.
He noted that Nigeria’s capital market has surged by about 100 per cent in the last two years, while CBN recorded the highest level of external reserves in over three years.
The lawmaker said that the apex bank is also reported to have recorded a profit of N38.8 billion, a remarkable turnaround from the N1.15 trillion loss recorded in 2023.
He, however, said that high interest rate has negatively impacted manufacturing, agriculture and small and medium enterprises (SME) sector, which are significant employers of labour.
“The Monetary Policy Rate (MPR) has been raised 10 times since January 2023 and currently standing at 27.5 per cent from 16.5 per cent in 2023, with the aim of curbing demand/inflation.
“However, it will appear that the effectiveness of this policy has been undermined by structural bottlenecks, supply chain inefficiencies etc.
“It is, therefore, our view that considering the current economic landscape, the monetary authorities, as they meet next week, should consider a more accommodative stance that also promotes growth and employment generation,” he said.
In his presentation, Adeniran said that the latest reference period published by the Bureau for Q2, 2024, reported an unemployment rate of 4.3 per cent, down from 5.3 per cent in the previous quarter.
He said that unemployment is more prevalent among females (5.1 per cent) than males (3.4 per cent) and is higher in urban areas (5.2 per cent) compared to rural areas (2.8 per cent).
Adeniran said young people face a relatively higher unemployment rate of 6.5 per cent compared to the headline figure.
Additionally, he said that 12.5 per cent of youths are not in employment, education or training, with the rate higher among young females (14.3 per cent) compared to young males (10.9 per cent).
The statistician-general said that the Q3 and Q4 2024 reports are being finalized, after which they would be disseminated to the public.
– NAN