Federal Government of Nigeria plans to crash interest rates with special bank

Federal Government has unveiled plans to establish a special finance institution that will attract funds into the economy at lower interest rates.

The Minister of Finance and the Coordinating Minister of the Economy, Ngozi Okonjo-Iweala, stated this on Friday in Ilorin during her visit to KAM Industries Nigeria Limited’s multi-billion naira cold steel rolling mill.

She said the bank, which could be established in the next 15 to 18 months, would lend funds to the Bank of Industry, Bank of Agriculture and commercial banks to ensure that interest rates were reduced to a sustainable level for indigenous industries to grow.

Okonjo-Iweala said the government was concerned about the high interest rates being charged by banks and was working to provide an enabling environment that would assist the banks to reduce the rates, especially for indigenous manufacturers and industrialists.

Although she acknowledged the contributions of the banks to the national economy, the minister said the high rate of 20 per cent and above was not favourable for industrial growth.

The minister noted that in recognition of its importance, President Goodluck Jonathan in January 2012 granted an approval for new and existing industries in the steel sector to import their machineries, equipment, spare parts and raw materials for the establishment of cold roll steel plants at zero per cent duty.