The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has announced that the federal government is providing up to N1 billion in credit facilities to large enterprises, including manufacturers, at a 9% interest rate. Edun made this statement during an interview on Channel TV on Sunday, June 2, 2024, discussing the state of the economy.
According to Edun, both large and small-scale businesses can access the loan at no more than 9% interest. Small-scale businesses can obtain loans up to N1 million, while large industries are eligible for as much as N1 billion, all at the same modest interest rate.
“Our emphasis is that we make sure that we ramp up the speed and the scale of the help that is there. We are offering loans at 9% for medium-scale enterprises for up to N1 million for small enterprises.
“And for the larger enterprises, we are offering up to N1 billion funding at 9% so that those manufacturing firms can invest, grow the economy, employ people, and produce more goods that will help push down inflation.
“As I said, for the largest enterprises, the government did sit down with the private sector, the manufacturer association and other stakeholders and the governors to provide an economy stabilization plan and have the measures announced,” Edun said.
Edun noted that the position of the Central Bank of Nigeria (CBN) in increasing interest rates is already working to rein in inflation. He stated that the inflation rate has gradually declined quarter by quarter this year compared to last year.
The Minister emphasized the need for the government to “stay the course” to ensure that inflation is brought down and prices of goods and services stabilize.
“It is very rare that the monetary authorities set as their target fighting inflation, bringing down prices generally. We have seen gradual growth quarter by quarter. Compared to the first quarter last year, growth is up. It is up to about 2.9% above population growth. You do have the economy growing in the right direction.
“We just need to stay the course and in staying that course, help is being given across the board,” Edun added.
### What you should know
The CBN last May increased the monetary policy rate by 150 basis points to 26.25% from 24.75%. Many business owners and stakeholders have expressed concerns that this hawkish position of the apex bank will negatively impact the economy, particularly making it difficult for them to access loans.
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) stated that the policy could inadvertently cause inflation, with businesses likely to increase the prices of goods and services to offset the higher borrowing costs. Others have raised similar concerns, adding that the rate increase is counterproductive and will not address money supply challenges in the country.
