Peter Obi, the presidential candidate of the Labour Party, has voiced his concerns over the Central Bank of Nigeria’s (CBN) decision to increase the interest rate. He explained that this move would negatively impact the economy and the majority of Nigerians. The former governor of Anambra also believes that this hike in the Monetary Policy Rate (MPR) and Cash Reserve Ratio (CRR) would result in job losses in the productive sector.
Peter Obi has criticised the recent decision of the Monetary Policy Committee (MPC) to raise the Monetary Policy Rate (MPR) to 22.5% and the Cash Reserve Ratio (CRR) to 45%. He believes that this move will further worsen the economic situation of most Nigerians.
In a series of tweets on his handle, Obi stated that the hike in MPR, also known as interest rate, would be counterproductive as it would not address the intended purpose of managing money supply. What the Nigerian economy needs now, he said, is practical originality and results. Obi cautioned that tinkering with classical economic theories can only deepen the crisis.
Obi added that the decision to raise the MPR and CRR would cause more job losses in the productive sector, especially manufacturing, and other sectors that rely on bank loans and credit facilities for their funding needs. He also pointed out that tightening liquidity in the financial system does not improve productivity, such as food production, which is the primary cause of inflation in Nigeria. Moreover, he stated that only about 12% of the total money in circulation, which is about N3.6 trillion, is in the banking system, while 88%, approximately N3.2 trillion, is outside the banking system.
Earlier, Peter Obi also commented on the topic of the N30 billion allocation to governors by the Federal Government. He urged governors to use the contentious funds wisely.
Peter Obi expresses concern over CBN’s interest rate hike, citing potential job losses and worsened economic conditions
