The President and CEO of the Dangote Group, Aliko Dangote, criticized the Central Bank of Nigeria (CBN) for raising interest rates to nearly 30 percent.
Speaking at the Banquet Hall of the Presidential Villa in Abuja during a three-day summit organized by the Manufacturers Association of Nigeria (MAN), the Forbes’ richest man in Africa expressed concerns that the current interest rate regime would hinder the manufacturing sector’s ability to create jobs, grow, and compete effectively.
In its latest Monetary Policy Committee (MPC) meeting, the CBN decided to increase the Monetary Policy Rate (MPR) for the third consecutive time from 24.75 percent to 26.25 percent.
The interest rate had previously been raised by 400 basis points to 22.75 percent from 18.75 percent in February, by 200 basis points to 24.75 percent in March, and by 150 basis points to 26.75 percent in May.
CBN Governor Olayemi Cardoso emphasized that the main focus was “to achieve price stability by effectively using tools available to the monetary authority to rein in inflation.”
The World Bank recently warned that the CBN might not be able to effectively control inflation by increasing the monetary policy rate, noting that this poses a risk to economic growth.
During his speech at the summit, Dangote called for new policies to protect domestic industries and urged the federal government to create an enabling environment for businesses, particularly manufacturers, to thrive.
He stated: “Nobody can create jobs with an interest rate of 30%. 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”, he stressed.
Dangote highlighted that industrialisation is an “inescapable route” to sustainable and inclusive economic growth and human development.
According to him, manufacturing is essential for a nation’s economic development and self-sufficiency.
“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”, he concluded.
