Nigeria’s central bank should lower interest rates so that the government can borrow domestically to boost the economy, which is stuck in recession, without increasing its debt-servicing costs, the Country’s Finance Minister, Kemi Adeosun said on Monday, September 19, 2016.
The Government also planned an “immediate large injection of funds” through asset sales, advance payments for license renewals and infrastructure concessions, its Budget Minister said.
Finance Minister Kemi Adeosun said she is working with the debt office, Nigeria’s sovereign wealth fund and the pension industry to issue an infrastructure bond to raise money for road and housing projects. She did not elaborate.
She said she wanted the Central Bank of Nigeria (CBN) to reconsider its July interest rate increase, which it implemented to help support the naira and attract foreign investment.
The CBN, which is independent of the government, is due to announce its next rate decision on Tuesday. Economists polled by Reuters last week predicted that the CBN would keep its key interest rate at 14 percent and reiterate its focus on resuscitating the economy.
“We need lower interest rates, because when we are borrowing and interest rates go up, it increases our cost of debt service and it reduces the amount of money that is available to spend on capital projects,” Adeosun told CNBC Africa.
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