- High Interest Rates Killing Manufacturing —Afe Babalola
The Founder of Afe Babalola University, Ado Ekiti, Aare Afe Babalola (SAN), has blamed the Federal Government for allowing banks to charge high interest rates on loans, thereby killing local manufacturing in Nigeria.
He also lamented that the country was running the most expensive democracy in the world where constituency allowance of a member of House of Representatives at N136m was more than the entire N91.04m annual emoluments of the United States President.
Babalola spoke in Ado Ekiti on Thursday at the 34th Annual General Meeting and Public Session of the Ekiti, Oyo, Osun and Ondo states’ branch of Manufacturers Association of Nigeria.
He said, “We have two-digit interest rates charged by banks today. Who is that businessman that will make a profit after paying 27 per cent on facilities he took from a bank? Manufacturers will continue to remain slaves to banks. Can you make 26 per cent profit in a year? Things don’t work like that in other climes.
“They have made politics to become so lucrative that the best thing to do is to join politics. Politics has become the only lucrative business in Nigeria, not manufacturing. There are so many issues for us to treat. All hopes are not lost.”
The branch Chairman of MAN, Chief Kola Akosile, said the association had been able to resolve operational challenges associated with land use charge law of Oyo State, waste management tariff, haulage on manufactured products and illegal taxes by some local government authorities, among others.
He lamented that the greatest problem confronting manufacturers in the country was acute shortage of foreign exchange and the continuous depreciation of the naira value, urging the government to do something to address the issue.
In his address, the President of MAN, Dr. Frank Jacobs, appealed to governors to patronise made-in-Nigeria products to drive industrial development and economic growth.
Jacobs, who was represented by Segun Quadri, stated that government remained the largest single spender in the economy.
“It is an established fact that when we buy foreign goods, we pay the returns to factors used in producing them in the originating countries; that is to say that we pay wages, rent, interest and profit to foreign countries with our local resources.
“On the other hand, greater patronage of made-in-Nigeria products will enhance the manufacturing sector and this will result in increased revenue to government through taxes, employment creation, reduction in anti-social vices as well as peace for the populace of the state.”
