El-Rufai attacks CBN, says bank destroying jobs

The Kaduna State governor, Nasir el-Rufai, on Wednesday decried the Central Bank’s prevailing fiscal regime, saying the bank’s 14 per cent monetary policy rate has led to massive job losses in the country.

Mr. El-Rufai said the CBN risked losing its power to set lending rates for commercial banks unless it immediately addressed the situation, adding that only unscrupulous elements could successfully operate under the current fiscal policy atmosphere.

“We have a Central Bank that has an MPR at —what?— 14 per cent and banks lending at 20 percent. Only traders and drug dealers can make money at this interest rate.

“I have said it before and I will repeat it again, unless the Central Bank and the banking system make a conscious decision to bring interest rate down, one day we would legislate it,” Mr. El-Rufai said.

The governor’s comments were delivered at a special edition roundtable organised by Women in Business, a non-profit women advocacy organisation, in Abuja.

Mr. El-Rufai dismissed CBN’s perennial reasons for high interest rate, and used the “B” word to express his disgust.

“The rate of inflation in the UK is not 2 per cent or 1 per cent. It is 7-8 per cent. But lending rate is at what one percent. I think they cut the interest rate last week.

“All these theories that the rate of interest must be above the rate of inflation is economic [expletive],” Mr. El-Rufai said.

“We must decide that businesses should be able to borrow at the rate interest that makes sense and politically lower rates to that level.”