Nigerians have canvassed interest rates’ crash to stem the increasing inflationary rates according to Central Bank Of Nigeria (CBN) latest inflation attitude survey.
Latest National Bureau of Statistics (NBS) in November 2019 shows inflation rates went up to 11.85 per cent. The rates peaked at 11.30 per cent in October of 2019.
Respondents argued the economy will end up weaker if prices of goods rise faster than they do already.
The survey which covered the fourth quarter of 2019 shows 50.1 per cent of the respondents strongly support a crash in interest rate.
One of the strongest throw-ups of the survey is that larger percentage of Nigerians are disconnected or not knowledgeable about governance as they are in the ‘I don’t know’ category of respondents.
The Q4 2019 Inflation Attitudes Survey held November 18 – 27, 2019 from a sample size of 2070 Households randomly selected from 207 Enumeration Areas (EAs) across the country, with a response rate of 99.9 percent indicates concern about the rise in prices leading to a weaker economy.
The survey results on interest rates shows that 7.6 per cent of respondents believed that interest rates had fallen, 20.0 per cent of the respondents were of the opinion that the rates risen in the last 12 months, while 44.1 per cent of the households had no idea. The result revealed that more households had no idea on the direction of interest rate in the past 12 months.
On the expected change in interest rates on bank loans and savings over the next 12 months, some respondents (24.8 per cent) were of the view that the rates will rise, while 15.1 per cent believed that the rates will fall. However, more respondents (60.1 per cent) of the respondents either expected no change or had no idea.
Furthermore, respondents were asked whether it would be best for the Nigerian economy if interest rates rise or fall.
The results showed that 39.0 per cent indicated that it would be best for the Nigerian economy if interest rates fell, while 5.2 per cent opted for higher interest rates. Those that thought that it would make no difference accounted for 16.2 per cent, while 39.5 per cent had no idea.
These responses revealed that, while many of the respondents favored lower interest rates for the Nigerian economy, many more had no idea whether it should rise or fall.
The survey results for interest rates inflation showed that 37.3 per cent thought a rise in interest rates would make prices in the street rise slowly in the short term, as against 9.6 per cent that disagreed. While in the medium term, 35.4 per cent agreed that a rise in interest rates would make prices in the street rise slowly, 11.5 percent disagreed.
According to opinions on the Central Bank Of Nigeria to assess whether people are aware of the way monetary policy works in Nigeria, respondents were asked if they knew which group of people meet to set Nigeria’s monetary policy rate.
Responding, 21.7 per cent felt it was the Monetary Policy Committee, 8.4 per cent felt it was the Federal Ministry of Finance, 29.9 per cent believed it was the Government, 3.3 per cent felt it was the National Assembly, while 0.9 and 35.8 per cent answered, ‘others’ and ‘do not know’.
Similarly, when asked to identify which group mostly influences the direction of interest rates, the result indicated that 39.9 per cent of the respondents were aware that the Central Bank of Nigeria influences the direction of interest rates.
However, 8.6 per cent stated that it was the Government ministers, 4.1 and 13.1 per cent were of the opinion that civil servants and banks influence the rates, respectively. Majority of the respondents (34.3 per cent) had no idea.
And on what best describes the Monetary Policy Committee, 27.8 per cent felt it was influenced by the Government, 10.4 per cent felt it was the federal ministry of finance, and 6.6 per cent believed that it was the national assembly, while 14.6 per cent thought it was not influenced by any arm of government and 40.6 percent had no idea.
When asked how satisfied they were with the CBN’s management of interest rates in Nigeria. The net satisfaction index, which is the proportion satisfied less the proportion dissatisfied, stood at 2.5 per cent. Among the satisfied group, 4.0 per cent were ‘very satisfied’, while 21.9 per cent were ‘fairly satisfied’.
However, 18.1 per cent were ‘neither satisfied nor dissatisfied’ whereas 12.6 per cent were ‘very dissatisfied’. Those who had no opinion accounted for 32.6 per cent of the respondents.