By Abubakar Yunusa
Aliko Dangote, President of Dangote Group Industries Ltd, criticized Nigeria’s high interest rates, stating they are stifling economic growth and job creation.
Speaking at a three-day summit in Abuja organized by the Manufacturers Association of Nigeria (MAN), Dangote drew comparisons between Africa’s response to the COVID-19 pandemic and that of G7 countries.
“Mr. Vice President, today we are battling very high interest rates meant to fight inflation. I’m not an economist, just a local businessman. The G7 countries increased rates because they pumped $18.9 trillion into their economies during COVID-19, leading to more money chasing fewer goods. But in Africa, we did almost nothing during the pandemic,” Dangote remarked.
He continued, “At a 30% interest rate, creating jobs is impossible. This rate stifles growth and must come down for any economic progress.”
The Central Bank of Nigeria (CBN) has increased interest rates by 750 basis points this year, raising them from 18.75% to 26.25%. Despite the CBN’s stance that high rates are necessary to curb inflation, many experts doubt their effectiveness and argue they increase the cost of capital, harming the real economy.
Dangote warned that relying on imports equates to importing poverty and urged the government to support local businesses, especially manufacturers, by creating a conducive environment for growth. He emphasized the need for a robust industrialization policy to tackle unemployment, poverty, and insecurity.
“Nigeria has the potential to develop a globally competitive manufacturing sector, but we need to rethink our industrialization strategy,” Dangote stated. He called for policies that protect and cultivate local industries, similar to practices in leading Western and Eastern countries.
He acknowledged various factors hindering the manufacturing sector’s performance but stressed that government policy and its approach to investments are critical. Dangote emphasized the importance of promoting manufacturing investments, attracting investors, and ensuring these investments are nurtured and protected.
“Since the mid-1980s, non-industrialized countries have been discouraged from protecting their investments and exposed to unfair competition from stronger, older competitors. Yet, these older players are well-supported in their home markets,” he concluded.