The 2023 Labour Party presidential candidate, Peter Obi, has reiterated his criticism of the current government’s monetary policy, referencing recent remarks made by Africa’s wealthiest man, Aliko Dangote. Obi’s statement was prompted by Dangote’s objection to the prevailing 30% interest rate, which both business leaders argue is hindering economic growth and job creation in Nigeria. “Dangote’s recent objection to the current 30% interest rate echoes my previous concerns raised in February about the adverse impacts of the present Federal Government’s monetary policy,” Obi stated in a release on Thursday via X. On Tuesday, Dangote, the Chairman and Chief Executive Officer of the Dangote Group, expressed that the increasing interest rate hikes would negatively affect local manufacturers.
Dangote made these statements at the start of a three-day National Manufacturing Policy Summit organized by the Manufacturers Association of Nigeria at the Banquet Hall of the State House in Abuja. He emphasized, “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.” These remarks followed the recent decision by the CBN’s Monetary Policy Committee to raise the Monetary Policy Rate for the third consecutive time from 24.75 per cent to 26.25 per cent.
Expanding on his points, Obi stressed the implications of these high rates, citing Dangote’s statement that “no jobs will be created with such a high interest rate because there will be no growth in the economy.” Obi referred back to his opposition in February to the Monetary Policy Committee’s decision to raise the Monetary Policy Rate (MPR) to 22.5 per cent and the Cash Reserve Ratio (CRR) to 45 per cent. He contended that these hikes would “push interest rates on loans to above 30%, which would be very difficult for manufacturers and MSMEs to borrow and repay.” The former Anambra State governor underlined recent data from the Manufacturing Association of Nigeria to emphasize the situation. “In 2023, 767 companies were shut down and 335 became distressed. The capacity utilization in the sector has declined to 56%,” he noted, adding that “the interest rate is effectively above 30%,” Obi quoted MAN.
Obi continued to highlight the broader economic consequences, stating, “These harsh economic policies, both on the monetary and fiscal sides, have continued to slow down our economic growth, drive multinationals out of the country, stifle our small businesses and discourage the inflow of foreign direct investment.” Urging immediate action, Obi stressed the importance of “reversing this negative trend which is causing further job losses, hindering production in our nation, and impeding our transition from consumption to production.” “We must change direction and implement policies that foster growth and the emergence of a new Nigeria,” Obi emphasized.
