Aliko Dangote, President of Dangote Group Industries Ltd, expressed concerns about the Central Bank of Nigeria’s (CBN) high interest rates, stating that they are hindering economic growth and job creation in the country. Speaking at a summit organized by the Manufacturers Association of Nigeria (MAN), Dangote highlighted the contrasting economic responses to the COVID-19 pandemic between Africa and the G7 countries.
Dangote emphasized that during the pandemic, G7 countries injected large sums of money into their economies, resulting in a surplus of money chasing limited goods. In contrast, African countries, including Nigeria, did not take similar measures, leading to stagnant growth. The high interest rate of 30% in Nigeria is stifling growth and making it challenging to create jobs.
The CBN has raised interest rates by 750 basis points across three consecutive Monetary Policy Committee (MPC) meetings this year, citing the need to control inflation. However, experts have raised concerns about the effectiveness of these rate hikes in curbing inflation, as they can negatively impact the real economy by increasing the cost of capital.
Dangote also emphasized the importance of reducing reliance on imports, stating that a country dependent on imports is essentially importing poverty. He called on the government to support existing businesses, particularly manufacturers, by creating a conducive environment for their success. Empowering the manufacturing sector is crucial to addressing unemployment, poverty, and insecurity in Nigeria.
Dangote highlighted the potential for Nigeria to develop a globally competitive manufacturing sector but stressed the need to rethink the country’s industrialization policy. He urged the government to adopt policies that protect and nurture local industries, similar to leading countries in the West and East. By promoting investments in manufacturing, attracting investors, and ensuring their growth and sustainability, Nigeria can generate much-needed jobs and prosperity.
Dangote acknowledged that there are various factors contributing to the underperformance of the manufacturing sector, but he emphasized that government policy and its approach to investments and investors are crucial areas that require attention. He called for a shift in focus from supporting older and bigger competitors to protecting and supporting investments in the manufacturing sector.
In conclusion, Dangote’s remarks shed light on the challenges posed by high interest rates on economic growth and job creation in Nigeria. He emphasized the need to support the manufacturing sector and highlighted the importance of government policies that protect and nurture local industries. By creating a conducive environment for businesses to thrive, Nigeria can unlock its potential for a globally competitive manufacturing sector and drive economic prosperity.
