Former Labour Party (LP) presidential candidate, Mr. Peter Obi, has stated that Aliko Dangote’s recent criticism of the current 30 percent interest rate highlights his previous concerns about the detrimental effects of the Federal Government’s monetary policy.
Obi had opposed the Monetary Policy Committee’s decision to raise the Monetary Policy Rate (MPR) and the Cash Reserve Ratio (CRR) to 22.5% and 45%, respectively. He argued that these increases would exacerbate the economic situation, pushing loan interest rates above 30%, thus making it very difficult for manufacturers and MSMEs to borrow and repay.
In a statement on Thursday via his X handle, Obi noted that Aliko Dangote, Africa’s leading entrepreneur and respected Nigerian businessman, emphasized that no jobs would be created with such a high interest rate, aligning with Obi’s longstanding position.
The former Anambra State governor stressed the urgent need to reverse this detrimental trend, which is causing further job losses, discouraging production, and hindering Nigeria’s shift from consumption to production.
Obi said: “Aliko Dangote’s recent outcry against the 30% interest rate underscores my earlier warnings about the negative impacts of the current monetary policy. Dangote’s assertion that such high interest rates stifle job creation and economic growth echoes my consistent stance.
“In February, I opposed the Monetary Policy Committee’s decision to increase the MPR to 22.5% and the CRR to 45%, as these hikes would push loan interest rates above 30%, making it very challenging for manufacturers and MSMEs to secure and repay loans.
“If Africa’s richest person and foremost industrialist is raising concerns, imagine the adverse effects on MSMEs, which are the engine of economic growth.
“A recent report from the Manufacturing Association of Nigeria (MAN) indicated that in 2023, 767 companies shut down and 335 became distressed. Capacity utilization in the sector declined to 56%; interest rates exceeded 30%; foreign exchange for raw materials and production machines was scarce; unsold finished products inventory rose to N350 billion; and real growth rate dropped to 2.4%.
“These harsh monetary and fiscal policies have slowed our economic growth, driven multinationals out of the country, stifled small businesses, and discouraged foreign direct investment.
“We must urgently reverse this harmful trend that is causing job losses, discouraging production, and hindering our transition from consumption to production. We need policies that promote growth and the emergence of a new Nigeria. A New Nigeria is Possible.”