The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, on Saturday, hinted at a probable increase in lending rates sequel to the unrelenting headwinds that keep pushing up the nation’s inflation rate.

Emefiele, who spoke with journalists on the sidelines of the ongoing World Bank/IMF Spring Meetings in Washington DC, United States, said having the inflation rate higher than the Monetary Policy Rate (MPR), which is the benchmark lending rate, was not an acceptable model.

The CBN governor said: “Truly, Nigerians expect that if they want to access fund, they should do so at a low interest rate but, of course, you will agree with me that with the increase in inflation rate from about 11.3 per cent that it was in February to almost about 12.4 per cent in March, naturally what you find is that interest rate will still have to go up sort of because having the MPR below the inflation rate is not a model that is acceptable. Interest rate has to be higher than inflation rate. So, that is what we expect.”

He, however, added that in spite of the hostile domestic and global fiscal headwinds, the apex bank would continue to do everything reasonable to stimulate broad-based growth of the economy through innovative monetary policy measures.

According to him, the bank’s supportive monetary measures would continue to be focused on critical sectors such as agriculture, real and mining with the potential of boosting domestic production and, by implication, help in the efforts to sustain macroeconomic stability and inclusive growth.

Speaking on the shocks being experienced by oil-exporting countries, Emefiele said that mitigating the negative impact could be achieved through the diversification of the economies and described the drive by the government to diversify the economic base as a step in the right direction.

He said, “Practically, all are facing the challenges and everybody is looking at the possibility of diversifying their economies from being over-reliant on oil. So, obviously we are on the right course, but the challenges are still there, not just for Nigeria but for different countries in the world.

“But what is important is, I re-emphasise, that we are on the right course by saying that we need to continue to diversify our economy and I think for Nigeria, I see light at the end of the tunnel because we have a couple of Nigerian investors that have embraced the diversification of the Nigerian economy.”

Restating the commitment of the CBN to stimulate growth in critical sectors of the economy, the governor explained that the regulatory financial institution would continue, as much as possible, to see how it could “continue to increase our interventions to certain sectors of the economy, particularly agriculture, mining, the real sector and other areas that will boost domestic production.” (Sunday Tribune)

•Photo shows CBN Governor Emefiele.

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