Doing business at high interest rates is impossible: Apex MD

Bangla Press Desk:  Apex Group Managing Director (MD) Syed Nasim Manzur has said that businesses are facing extreme hardship due to the central bank’s strict policies and continuous increase in interest rates aimed at controlling inflation. 

He made this remark on Thursday at an investment dialogue organized by the Bangladesh Investment Development Authority (BIDA).

He said, “The current interest rate has made running a business almost impossible.”

Speaking at the dialogue at the BIDA office in Agargaon, the capital, Nasim Manzur addressed the Governor of Bangladesh Bank directly:

“Business people cannot endure this interest rate. It is becoming impossible for us. Sir, we are not against lowering the interest rate, but right now doing business is very, very difficult.”

He explained that compared to competitor countries like Vietnam and India, the cost of capital in Bangladesh is so high that it has become difficult to remain competitive in production and exports.

The Apex Footwear entrepreneur also strongly criticized the tax policies. He said, “Advance tax and tax deduction at source have become tax terrorism. Whether we make a profit or incur losses, we always have to pay taxes. Many times our losses were bigger, but even then we had to pay more tax. We want relief from this situation.”

He added that although some reforms by the NBR, such as bond automation or resolving HS code issues, are positive, advance tax and tax deducted at source have become the biggest burdens for businesses.

On the issue of money laundering, Nasim Manzur said, “It is not only businesspeople who have become wealthy in Bangladesh. Among the money laundered abroad, the highest amount has been laundered by bureaucrats. It is not right to place the entire blame on the business community.”

He also called for legal action against businesspeople involved in corruption or fuel theft.

He urged the government to reactivate the EDF fund for exporters, improve law and order, resolve Dhaka’s transport crisis, and clearly state its position regarding LDC graduation.

At the event, various officials answered questions from businesspeople, including Energy Advisor Muhammad Fauzul Kabir Khan, Special Envoy of the Chief Adviser Lutfey Siddiqi, Bangladesh Bank Governor Ahsan H. Mansur, NBR Chairman Md. Abdur Rahman Khan, and BIDA Executive Chairman Ashiq Chowdhury.

Responding to business owners’ concerns, Bangladesh Bank Governor Ahsan H. Mansur said, “If inflation falls below 8 or 7.5 percent, interest rates may come down to single digits. Reducing interest rates administratively right now would be a severe policy reversal.”

He further stated that in the past, real interest rates were negative, which destabilized the market. Now, due to higher interest rates, the market has stabilized, and the exchange rate has also become stable. He expressed hope that by the end of the fiscal year, inflation would fall below 5 percent, and sustainably it could even come down to 4 or 3 percent.

Business owners said that high interest rates, tax burdens, and infrastructure problems have made running businesses extremely difficult. On the other hand, Bangladesh Bank maintains that to reduce inflation sustainably, a strict policy stance must be maintained for some time.

BP/SP