Businesses Can’t Survive 25-30% Interest Rate Regime—Saraki

Senate President, Mr Bukola Saraki, has disclosed that the 25-30 percent interest rate being charged by banks on loans to business owners was making it difficult for genuine businesses to survive in the country.

The number three citizen of the country described the 25-30 percent interest rate regime as a “yoke too hard to bear for any real sector business.” “Our businesses need a breather. I am a firm believer that unless we are ready to think outside of the box and task ourselves to make sacrifices and take hard decisions with a view to the future we will not make much progress,” he posited.

The Senate President, in his speech at the stakeholders roundtable organised by the Senate to address increasing interest rates in Nigeria in Abuja on Tuesday, noted that unless a solution was found to this issue, the economy will continue to suffer. At the summit, which took place at the Senate Conference Room 022, Senate New Building, Mr Saraki expressed satisfaction with the turnout, saying stakeholders align with vision of the Senate of a “more sustainable interest rate regime that enables our people to do business, create wealth and be empowered to follow their dreams.”

According to him, the 8th National Assembly has made efforts in creating great opportunities for private sector to grow especially with the passage of several bills to back the economy. He listed these as “the Nigerian Railway Bill, the Public Procurement Act Amendment Bill, the Nigerian Ports & Harbour Bill, the National Road Funds Bill, the National Transport Commission Bill, and the National Inland Waterways Bill.” Others, according to the Senate President, include the Federal Roads Bill, the Competition and Consumer Protection Bill, the Investment & Securities Act Amendment, the Companies and Allied Matters Act Amendment, the Secure Transactions in Movable Assets Bill, the Independent Warehouse Regulatory Bill, the Bankruptcy & Insolvency Act (Repeal & re-enactment) Bill, the Electronic Transactions Bill and the Nigerian Postal Commission Bill.

Mr Saraki noted that, “All these legislative actions we are taking is rooted in our believe that if we are to attract more investments, add more jobs in the market, promote business development and widen the range of possibilities and opportunities for our teeming youthful population, a demographic advantage we are yet to fully explore, we must create the right legal regulatory and institutional frameworks that is enabling in a free market.” However, he lamented that despite these efforts, the 25-30 percent interest rate regime in the country was frustrating efforts of the legislative arm of government. Mr Saraki queried, “How can an investor anywhere survive on these rates? How can they create jobs and make returns? But this is the situation our businesses currently live with.”

“The Senate fully appreciates the economic complexities that determine interest rate regimes. It fully recognizes that high inflation times call for interest rate hikes and such other arguments. But unless businesses are able to survive, inflation and all other market conditions alone will not make the difference,” he noted. The Senate President warned that, “We must as a matter of deliberate policy frame our monetary policy regime towards support for businesses otherwise, our economy rescue mission may not be attained.

“It will be profoundly improbable to genuine businesses like agriculture, production and solid minerals to survive on interest rate regime of 30 percent.” “Let’s give a chance to our poultry and cassava farmers, welders, builders, our fashion designers, filmmakers, shoemakers, furniture companies and our other numerous small and medium sized industries a chance to stay alive and make a living for their families,” he appealed.

Dipo Olowookere