Ex-Senate President Lawan Laments 34% Interest Rate, Says It’s Stifling Investments, Food Production

Former Senate President, Senator Ahmad Lawan, has expressed deep concern over the detrimental impact of Nigeria’s 34% interest rate on borrowing from commercial banks, describing it as a major hindrance to business investments and food production in the country.

Lawan made these remarks on Saturday during the launch of a grain and food distribution initiative for vulnerable groups in his Senatorial District of Yobe North, Yobe State. He highlighted the significant struggles faced by local businesses and farmers who are unable to compete due to high borrowing costs.

During the event, which was organized by the Senator Ahmad Ibrahim Lawan (SAIL) Foundation, the former Senate President underscored that while such humanitarian efforts are helpful, they are only short-term solutions. He called for more sustainable strategies to address the nation’s broader economic and security challenges.

“There is a need for those of us who can afford it to help those who are in dire need. It is no secret that many Nigerians are in a very desperate situation,” Lawan said. “Our desire is to make every Nigerian self-reliant. Bailouts like this, or stopgap arrangements, cannot solve the problems, but we need to take such steps for now.”

Senator Lawan urged both the federal and state governments to work together in providing good governance and praised the Yobe State government for its efforts in assisting vulnerable communities. He also expressed hope that the economic reforms introduced by President Bola Tinubu’s administration would show positive results by 2025 but emphasized that state governments must play a complementary role.

The senator also lamented the hardships faced by farmers, particularly in the northwestern states, who have been displaced due to insecurity. He called for urgent measures to help farmers return to their farms, access necessary inputs, and boost productivity.

Lawan further criticized the high interest rates imposed by commercial banks, calling them “callous” and a major obstacle to economic growth. He pointed out that while many countries offer low interest rates of around half a percent, Nigeria’s rate of 34% is prohibitive and makes it difficult for businesses and farmers to invest and compete.

“We must also do something to make funds for investment accessible. Today, the interest rate is prohibitive; in fact, it is callous. In other countries, they offer half a percent interest rate, but today, in this country, it is probably 34 percent when you go to the bank to borrow. How would you invest and compete with farmers from countries that offer half a percent interest rate?” he said.

The senator reiterated the importance of both immediate interventions for businesses and farmers and the implementation of long-term solutions to ensure sustainable economic growth in Nigeria.