Aliko Dangote, Chairman of the Dangote Group, has voiced strong concerns regarding the Central Bank of Nigeria’s (CBN) recent decision to increase the Monetary Policy Rate (MPR) to a staggering 26.25%. Speaking at a summit organized by the Manufacturers Association of Nigeria (MAN) at the State House in Abuja, Dangote emphasized the detrimental impact of such a high-interest rate on job creation and economic growth.
The CBN’s Monetary Policy Committee (MPC) announced the rate hike in May 2024 during its 295th meeting, citing the need to address economic and financial risks. Governor Yemi Cardoso stated, “The MPC decided to raise the MPR by 150 basis points to 26.25% from 24.75%.”
Economic Concerns: Impact on Manufacturing and Job Creation
During his address, Dangote highlighted the challenges businesses face under the current monetary regime. “Nobody can create jobs with an interest rate of around 30%. No growth will happen,” he remarked. Dangote stressed that the high cost of borrowing hampers manufacturers’ ability to expand, thereby stifling job creation and economic development.
He urged the government to prioritize protecting local businesses, particularly manufacturers, by fostering a more conducive environment for growth. He underscored the dangers of relying on imports, stating, “An import-dependent country is equivalent to poverty importation. No power, no prosperity. No affordable financing, no growth, no development.”
Challenges in the Manufacturing Sector
The President of MAN, Francis Meshioye, echoed Dangote’s concerns, pointing out the adverse effects of government policies on the manufacturing sector. He revealed that over 70 manufacturers exited the industry between 2019 and 2022, attributing their struggles to unfriendly economic policies and inadequate support.
Meshioye emphasized the need for a comprehensive review of the sector to align with the current administration’s developmental agenda. He called for innovative strategies to support manufacturers and revitalize the sector.
Policy Recommendations and Broader Implications
Dangote emphasized that addressing unemployment, poverty, and insecurity requires empowering the manufacturing sector to operate optimally. This would involve providing affordable financing options, reliable power supply, and supportive government policies. Without these, sustainable growth and development remain elusive.
The summit also featured Vice President Kashim Shettima, among other government officials, underscoring the importance of collaboration between policymakers and industry stakeholders to tackle Nigeria’s pressing economic challenges.
Conclusion
The ongoing dialogue between industry leaders and policymakers highlights the urgency of addressing Nigeria’s economic challenges. With interest rates nearing 30%, manufacturers and businesses face significant hurdles in contributing to the nation’s growth. Dangote’s call to action serves as a crucial reminder that fostering an enabling environment for local industries is essential to driving economic prosperity, reducing poverty, and creating jobs.
