The President and Chief Executive Officer of the Dangote Group, Aliko Dangote, yesterday faulted the hike of interest rate to almost 30 per cent by the Central Bank of Nigeria (CBN).
He spoke at the Banquet Hall of the Presidential Villa in Abuja at the commencement of a three-day summit organised by the Manufacturers Association of Nigeria (MAN).
The Forbes’ Africa’s richest man said with the current interest rate regime, it would be difficult for the manufacturing industry to create jobs, and grow and compete favourably.
The CBN had, during its last Monetary Policy Committee (MPC) meeting, 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. 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, where the governor of the CBN, Olayemi Cardoso, explained that the key focus remained “to achieve price stability by effectively using tools available to the monetary authority to rein in inflation”.
The World Bank recently cautioned that the CBN might not effectively curb inflation by hiking the monetary policy rate which, it noted, poses a risk to economic growth.
In his remarks at the opening of the summit yesterday, Dangote called for new policies that would protect domestic industries, urging the federal government to protect existing businesses in the country, especially manufacturers, by providing an enabling environment for them 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 noted that industrialisation is an “inescapable route” to sustainable and inclusive economic growth and human development.
According to him, manufacturing remains a key driver in a nation’s quest for 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 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.
