Bola Tinubu, the National leader of the All Progressives Congress (APC), has advised the Federal Government to provide tax reliefs that would aid financial institutions in the country to reduce their interest rates. He has also urged banks to offer tax reliefs and low interest rates to cushion the economic impact of the COVID19 pandemic in the country.
In his recent statement, the former Lagos state governor emphasized that lower rates will contribute to domestic investment, production, and job creation. He acknowledged that while lower rates may initially have some negative impact on inflation and the exchange rate, the economic dislocations caused by the coronavirus will serve to mitigate those temporary consequences.
Tinubu also presented a detailed argument against high interest rates in the current economic climate, emphasizing the adverse effects of high rates on domestic investment, government borrowing, and foreign financial speculation. He called for a shift towards lower interest rates to stimulate private-sector growth and job creation.
He further highlighted historical and structural issues in Nigeria’s financial system, emphasizing the need for a modernized approach to economic development. Tinubu also suggested that the current economic challenges, including the impact of the coronavirus, present an opportunity to consider lowering interest rates, driving down interest rates to stimulate private sector borrowing, and encouraging consumer borrowing.
He concluded by advocating for a long-term positive relationship between lower interest rates and economic growth and stressed the need for reforms in real estate and government mortgage policies to deepen the mortgage markets and spur economic activity.
Tinubu’s statement serves as a comprehensive analysis of the negative impact of high interest rates on Nigeria’s economic growth and calls for urgent measures to address these challenges.
Signed
Asiwaju Bola Tinubu,
APC National Leader,
May 3, 2020.