The Tragedy Of Our Monetary Policy...Prompting Commercial Banks To Desist From Lending?

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Each month, our national earnings in billions of dollars are simply kept in CBN reserves. The CBN then prints the naira equivalent of this sum and literarily shares the largese among our commercial banks by depositing it therein for free. The govt deems it prim, fit and proper to borrow money from the same banks at humongous interest rates. As it does so, it continues to keep huge amounts in foreign reserves. So, why would our govt borrow money at cost while it keeps idle funds in reserves?

Now why would these banks lend money to the real sector with genuine risk of payment defaults (occasioned by uncompetitive pricing borne out of poor infrastructure) when they can easily lend to govt with near-zero risk of payment default?

Our federal govt now deems it okay to increase interest rates at commercial banks thus further discouraging the citizenry from borrowing money from our banks! As this govt brazenly discourages banks from lending to business concerns....and equally disuades businesses from borrowing from banks, whose interest is it really serving?

All these are asides of the bloated bureaucracy leading to most national funds being used on recurrent expenditure....that is the remnants after brazen theft and inflated contracts!

Perhaps such scenarios as above are the main motivating factors for craving membership of cults and other clandestine groups. Afterall, money borrowed from pals in the "brotherhood" should come cheaper (at near-zero interest rates) and with less hassles than from commercial banks.....

Dr Tosin Akindele is a Lagos-based Medical Practitioner, a former Secretary of AGPMPN Ikorodu zone, a former Secretary of the Quackery Committee of AGPMPN Lagos State Branch, founder of Analytical Minds, a good health advocate and social critic.

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Articles by Tosin Akindele