CBN head office in Abuja

An Academic, Dr Michael Akur has commended Central Bank of Nigeria (CBN) for proposing to get Deposit Money Banks (DMBs) to lend credits at nine per cent to the manufacturing and agric sectors.

Akur, a lectural of Financial Statistics at the University of Jos, made the commendation in an interview with the News Agency of Nigeria (NAN) in Lagos on Wednesday.

According to him, the minimum tenor of seven years for repayment with a two-year moratorium will boost Nigeria’s economy recovery.

He also commended the CBN for resolving to continue to encourage Deposit Money Banks (DMBs) to increase the flow of credit to the real economy to consolidate economic recovery.

Akur said that apart from the special Cash Reserves Ratio (CRR) regimes for the sectors, the government could allow the manufacturing sector access foreign exchange at a concessionary rate.

“The apex bank should allow manufacturers get foreign exchange at less than N300 to the dollar to boost production.

“The low foreign exchange rate should be used to buy raw materials and machinery which cannot be fabricated locally and continue to deal with the factors militating against good transportation system to reduce the cost of production.

“Transportation cost is one area of business that increases the overhead cost of most entrepreneurs.

“Addressing the transport challenges will bring down the cost of finished goods and expedite quick expansion into new frontiers,” he said.

NAN reports that CBN had on Tuesday retained its Monetary Policy Rate (MPR) at 14 per cent, saying it would implement a special Cash Reserves Requirement (CRR) regime that would encourage DMBs to direct long term bank credits to the manufacturing and agriculture sectors.

The CBN governor, Godwin Emefiele said under the new arrangement, the loans would be available at about nine per cent, with a minimum tenor of seven years and two years moratorium to employment elastic sectors of the economy.