Africa’s richest man Aliko Dangote has highlighted high interest rates as a major impediment to job creation and economic growth in Nigeria.
Dangote, who is the founder and CEO of the Dangote Group, was speaking at the National Manufacturing Policy Summit organized by the Manufacturers Association of Nigeria (MAN) at the State House Conference Centre in Abuja when he aired his concerns.
The billionaire stated that the 26.25% interest rate fixed by the Central Bank of Nigeria (CBN) would cripple the manufacturing sector and stifle economic growth and development.
“Nobody can create jobs with an interest rate of 30 per cent. No growth will happen. No Power, no prosperity. No affordable financing, no growth, no development,”
Dangote said.
His remarks followed the CBN’s Monetary Policy Committee’s decision in May to raise the Monetary Policy Rate for the third consecutive time from 24.75% to 26.25%.
The committee had met on May 20-21 to review economic and financial developments in the country and to assess risks, when it resolved to increase the rates.
However, Dangote disagreed with the CBN’s move arguing that no business can cope with or afford such rates.
Tinubu’s industrialization policy
Moreover, the tycoon who has always been vocal about the need for Africa to be self-reliant, re-affirmed his stance on imports referring to them as a “harbinger of poverty.”
“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 industrialization without protection. Ignoring these facts is what gives rise to insecurity, banditry, kidnapping and abject poverty,” he asserted.
He urged President Bola Tinubu’s government to reconsider its industrialization policy and prioritize local businesses, especially manufacturers and create a conducive environment for them to thrive.
He highlighted the role of the manufacturing sector in addressing unemployment, poverty, insecurity and foreign exchange generation.
“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 re-think our industrialization 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 said.
Asian tigers
According to Dangote, the manufacturing sector’s decline has resulted in import dependence and poverty.
Drawing on examples from Asian countries, Dangote illustrated how government protection and support are crucial for achieving industrialization. He cited the success of Nigeria’s cement industry as evidence of the benefits of such policies.
“Manufacturing remains a key driver in a nation’s quest for economic development and self-sufficiency. It is easy to determine the level of economic development, growth, and well-being of a nation by observing its manufacturing sector,” the business magnate said.
“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, according to available statistics. Countries that have industrialized and have a robust manufacturing sector and can export manufactured goods are generally able to grow their economies through global trade,” he added.
Vice President Shettima, who chairs the National Economic Council (NEC) echoed Dangote’s sentiments, emphasizing the need for a robust industrial roadmap.
He urged the government to prioritize local content and products, referencing Executive Order 003, which mandates the patronage of locally manufactured products.
“We must be focused on expanding our production base, prioritizing local content, and promoting made-in-Nigeria products. The relevant government Ministries, Departments, and Agencies (MDAs) are mandated to fully comply with the order,” Shettima declared.
On his end, former Minister of Finance Olusegun Aganga called for the elimination of excessive customs duties, levies, and overlapping regulatory mandates to boost the manufacturing sector.
“What makes a country rich is what it does with its resources,” he said.
