Economy diversification: FG should allow low interest rate regime – Don
BAYO AKAMO, Ibadan
A Don with the Surveillance and Forecasting Department of the Nigerian Institute of Social and Economic Research (NISER), Ibadan Mrs. Olusade Taiwo has advocated low interest rate regime for the full implementation of the Federal government’s ongoing economy diversification campaign in the country.
Mrs Taiwo made the call in Ibadan while presenting this month’s NISER lecture titled “Macro-Economic Effects of Monetary Policy Rate in Nigeria”.
She pointed out that there is the need for the President Muhammadu Buhari led administration to fully implement the ongoing economy diversification campaign in the country
According to the financial expert, the low interest rate regime will give room for Nigeria as a country to have a smooth diversification of its economy in the areas of agriculture, mining, manufacturing and production giving the importance of these sectors to the achievement of economic diversification and transformation.
“Given the importance of manufacturing and agricultural sectors to the achievement of economic diversification and transformation, a concessionary low interest rate should be implemented to stimulate productive activities in these sectors,” she said.
Mrs Taiwo stressed that “efforts should be re-intensified to resolve lingering issues such as pricing assets; obsolete equipment and gas supply hindering the performance of the sector and ensure improved power supply to the various sectors of the economy”.
She noted that to minimize pressures on the exchange rate, inflation and foreign reserves, government should provide a policy to reduce foreign components with domestic substitutes in production processes.
The Don added that Nigeria should target developing an optimal power generation mix involving hydro, gas thermal and nuclear power plants to hedge against disruption by natural or man-made incidences.
She suggested a carefully but crafted differentiated interest rate system that target specific sectoral objectives to meet the individual demand of each sector of the economy.