Former Labour Party presidential candidate, Peter Obi, has stated that Aliko Dangote’s recent criticism of the current 30% interest rate supports his previous warnings about the detrimental effects of the Federal Government’s monetary policy.
Obi had previously criticized the Monetary Policy Committee’s decision to increase the Monetary Policy Rate (MPR) to 22.5% and the Cash Reserve Ratio (CRR) to 45%.
He argued that these increases would push loan interest rates above 30%, making it extremely challenging for manufacturers and small businesses to borrow and repay.
In a statement on Thursday via his X handle, Obi highlighted that Dangote’s assertion that no jobs will be created with such high interest rates aligns with his own long-standing position.
He emphasized the need to urgently reverse this trend, which is resulting in job losses, discouraging production, and hindering Nigeria’s shift from consumption to production.
Obi stated, “Africa’s foremost entrepreneur and respected Nigerian businessman, Aliko Dangote’s recent outcry against the current interest rate of 30% underscores my earlier cry in February on the negative effects of the monetary policy of the present Federal Government. According to Dangote, no jobs will be created with such a high interest rate because there will be no growth in the economy. This has been my consistent position over time.”
“In February this year, I argued against the decision of the Monetary Policy Committee to increase the MPR to 22.5% and the CRR to 45%, which, in my opinion, would further worsen the economic situation, as the increases would push interest rates on loans to above 30%, making it very difficult for manufacturers and MSMEs to borrow and repay.”
Obi continued, “If Dangote, the richest person in Africa and foremost industrialist, can complain, then imagine the negative impacts of these policies on MSMEs, who are the engine of economic growth. To further understand the harsh economic environment that this monetary policy has exacerbated, the recent report from the Manufacturing Association of Nigeria (MAN) stated: ‘In 2023, 767 companies were shut down and 335 became distressed. The capacity utilization in the sector has declined to 56%; the interest rate is effectively above 30%; foreign exchange to import raw materials and production machines is scarce; inventory of unsold finished products has increased to N350 billion; and the real growth rate has dropped to 2.4%.”
“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. Again, I maintain that we must urgently reverse this ugly trend which is seriously resulting in further job losses, discouraging production in our nation, and has continued to hinder our movement from consumption to production. We need to reverse course and only initiate policies that can lead to growth and the birth of a new Nigeria. A New Nigeria is Possible.”