Dangote Blames CBN’s Interest Rate Hike For Poor Economic Growth, High Unemployment


BY EDMOND ODOK – The President and Chief Executive Officer of the Dangote Group, Aliko Dangote, has blamed the Central Bank of Nigeria (CBN) for the nation’s stunted economic growth and worrying unemployment rate

According to Dangote, who faulted the interest rate increase to almost 30 per cent by the apex bank, it would be difficult for the manufacturing industry to create jobs, and grow and compete favourably given the current interest rate regime in the country.

Speaking during the three-day summit organised by the Manufacturers Association of Nigeria (MAN) at the Banquet Hall of the Presidential Villa in Abuja, the Africa’s richest man insisted that with the manufacturing industry cannot thrive let alone create jobs under the prevailing economic situation.

He said new policies that would protect domestic industries are needed urgently and the federal government must do a lot to protect existing businesses, especially manufacturers, by providing an enabling environment for them to thrive in the country.

In canvassing his position further, the billionaire businessman said; “Nobody can create jobs with an interest rate of 30 percent. No growth will happen. We must look to leading countries in the West and the East who are actively protecting their domestic industries.

“Import dependence is equivalent to importing poverty and exporting jobs. No power, no growth, no prosperity.

“Similarly, no affordable financing, no growth, no prosperity. There is no industrialisation without protection. Ignoring these facts is what gives rise to insecurity, banditry, kidnapping and abject poverty”.

The business mogul stressed that industrialisation is an “inescapable route” to sustainable and inclusive economic growth and human development, adding that manufacturing remains a key driver in any nation’s quest for economic development and self-sufficiency.

Hear him; “It is evident that the strength of a country’s manufacturing sector determines its capacity to compete in global trade, of which 70% is in manufactured goods.

“I am aware that the Bretton Woods Institutions have confused some of our economists about the word ‘protection’ to the extent that some of them think it is a blasphemy – a word that should not be uttered in good company.

“But how did China, Korea, India and several other Asian countries emerge as strong economies and a threat to the existing world economic order? We are often told that protecting your industries makes your country uncompetitive! This is pure fiction. It is quite the reverse.

“I say you cannot be competitive until you protect and support your own industry. Let me therefore conclude by reiterating that Nigeria has all it takes to develop and sustain a globally competitive manufacturing sector.

“But to do so, we must rethink our industrialisation policy. We must look to leading countries in the West and the East who are actively protecting their domestic industries. We must similarly enact policies to protect our domestic industries and nurture them into homegrown champions that will create the jobs and prosperity we desperately need.”

MAN Laments Unfavourable Microeconomic Environment

In his intervention at the Forum,  President of Manufacturing Association of Nigeria (MAN), Otunba Francis Meshioye,  noted that the prevailing microeconomic environment has put severe strains on the country’s manufacturing sector.

He said; “This is adversely affecting jobs and livelihoods of the citizens,” he said. He said the summit was organised to interrogate the evidence behind the constraints demeaning the performances of the industrial sector, “and to think and agree with the government on what to do to address them.

“The ultimate goal of the meeting is to reposition the sector on the path of accelerated growth, enhance its competitiveness and reap its multiplier effect on the economy and the wellbeing of the citizenry,” he stated.

We Are For Local Content, Made-in-Nigeria Goods – FG

Addressing participants at the Forum, Vice President Kashim Shettima, said the Federal Government fully support efforts at prioritising local content and promoting made-in-Nigeria products.

He said it was unfortunate that the manufacturing sector continues to endure a series of setbacks over the past decades despite its crucial role in building a nation driven by production and abundance.

The Vice President, who tasked stakeholders to develop an actionable roadmap and policy framework, ready for immediate implementation, to create the changes in the required manufacturing sector, said; “Let us be reminded that we cannot achieve significant progress in our drive for industrialisation unless we deliberately promote the production of capital goods.

“We must be focused on expanding our production base, prioritising local content, and promoting made-in-Nigeria products. I want to assure you that Executive Order No 003–Support for Local Content in Public Procurement by the Federal Government, which mandates the patronage of locally manufactured products–is still in effect.”

Maintaining that the relevant government Ministries, Departments, and Agencies (MDAs) are mandated to fully comply with the order, Vice President Shettima said the summit offered the opportunity to re-evaluate the challenges confronting the manufacturing sector and proffer solutions that would resolve them.

Forefront News recalled that at its last Monetary Policy Committee (MPC) meeting, the CBN resolved to increase the Monetary Policy Rate (MPR) for the third straight time from 24.75 per cent to 26. 25 per cent.

The interest was increased by 400 basis points to 22.75 per cent from 18.75 per cent in February while it was raised by 200 basis points to 24.75 per cent in March and by 150 basis points to 26.75 per cent at the MPC’s meeting in May.

Defending the position, the apex Bank Governor, Olayemi Cardoso, said the key focus remained “to achieve price stability by effectively using tools available to the monetary authority to rein in inflation”.

This is as the World Bank cautioned recently that the CBN may find it difficult to effectively curb inflation by hiking the MPR,  noting that such moves pose a serious risk to the country’s economic growth.

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