Published By: Ademola Adegbamigbe
24th May, 2023
Dr. Benard Adedotun Omoyeni , Managing Director of the award-winning export company, Palmadex Global Integrated Services Ltd, has identified high interest rate in Nigeria as a factor that reduces the efficiency of doing business in Nigeria.
Dr Omoyeni who spoke to PM News said the challenges in Nigeria’s troubled economy would largely be addressed with access to investment capital at low-interest-rate, this according to him will stimulate interest in investment in services and production activities by big corporations and SMEs.
Manufacturers and industries in the country have continued to lament that the harsh operating business environment which has remained challenging and is affecting the productivity and competitiveness . Entrepreneurs have to contend with rising production costs due to structural and institutional limitations.
“With a low interest rate in Nigeria, businesses will have the opportunity to raise cheap capital while those with existing bonds that were raised when rates were about 15-18 percent can restructure their debt.
Interest rates in Nigeria have always been high due to the monetary system since 2009, which sought to use FGN bonds/T-bills and OMO bills as a means of attracting US dollars into the country to stabilise the naira.
Dr Omoyeni said though the challenges persisted, they did not deter foreign direct investment into the country, as investors daily explore the country for investment purposes. Imagine the volume of investment that would have been attracted to Nigeria had the business environment been friendly.
In addition, Dr Omoyeni stressed that “Businesses may generally be affected by regional security threats such as those caused by separatist movements in the southeast and pastoral conflicts in the central north. In particular, manufacturing SMEs may also face extortion and harassment from hoodlums in their host community.
Business and startup owners in the country will have a hard time dealing with rising inflation, higher borrowing rates and a fast depreciating currency as ease of doing business worsens in Africa’s largest economy.
He recommends that the Federal government review its fiscal and monetary policies through the appropriate agencies having in mind the desire to promote growth and proliferation SMEs in the country, this will obviously translate into employment, Job creation and socio economic growth of the nation
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