“Consequently, manufacturers are hopeful that the stringent conditionalities for accessing available development funding windows with the CBN will be relaxed to improve the flow of long-term loans to the manufacturing sector at single digit interest rate.”an economist at Onabisi Onabanjo University, Professor Sheriffdeen, said higher prices were inevitable in the light of the recent rate hike by the CBN.
He added that the apex bank’s rationale of increasing the lending rate due to rising inflation was economically flawed. He said, “The increase in rate will lead to increase in prices because it means that the cost of borrowing money for business has increased. Even if they’re not borrowing, that signal indicates that when they want to borrow, they’re going to pay more. So, definitely, the price will rise and that is added to the fact that there’s already an increase in the price of energy, that is electricity as well as fuel.
“The increase arising from depreciation of naira because we import a lot of things also means higher prices. The third one is the fact that the Federal Government has been borrowing from the Central Bank and that is inflationary on its own. So, given all those three, they’ve made the price rise and there is a general increase in price in the world because of the war in Ukraine and Russia. So, all those have made prices go up.
Biggest problem we have is that, no alternative, always price up,
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