Aliko Dangote, Chairman of the Dangote Group, has voiced strong criticism against the Central Bank of Nigeria’s (CBN) recent hike in interest rates, warning that it could exacerbate economic hardships for Nigerians.
Speaking at the Manufacturers Association of Nigeria (MAN) 2024 summit in Abuja, Dangote highlighted the detrimental impact of nearly 30% interest rates on job creation and economic growth.
In May, the CBN’s Monetary Policy Committee (MPC) raised the Monetary Policy Rate (MPR) for the third consecutive time, from 24.75% to 26.25%.
CBN Governor Yemi Cardoso, who chairs the MPC, announced the decision after a two-day meeting aimed at reviewing economic and financial developments.
Dangote expressed his concerns during his keynote address at the summit, stating, “Nobody can create jobs with an interest rate of 30%. No growth will happen.” He emphasized the need for the government to support existing businesses, particularly manufacturers, by creating a conducive environment for them to thrive. He warned that an import-dependent economy equates to importing poverty.
Comparing the inflation drivers in developed and developing countries, Dangote pointed out that inflation in North America and Europe was largely due to extensive cash transfer programs during the COVID-19 pandemic, which injected approximately $18 trillion into their economies.
In contrast, African economies, including Nigeria, did not implement similar large-scale financial interventions.
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Dangote underscored the difficulty of fostering economic growth with high interest rates, stating, “At 30%, there is no way anybody can create jobs because we are actually stifling growth. So, interest rates can remain at 30%, but no growth will happen unless that interest rate comes down.”
He also called for the protection and promotion of local industries, citing examples from countries that, despite advocating free trade, implement policies to support their domestic industries, such as the United States, China, and India.
Echoing Dangote’s sentiments, MAN President Otunba Francis Meshioye criticized government policies for their negative impact on the manufacturing sector.
He revealed that over seventy manufacturers have exited the sector between 2019 and 2022, stressing the need for a strategic rethink to support manufacturing businesses and align with the current administration’s agenda.
