Peter Obi, the 2023 Labour Party presidential candidate, has reiterated his criticism of the current government’s monetary policy, echoing recent concerns raised by Africa’s wealthiest man, Aliko Dangote.
Obi’s remarks follow Dangote’s condemnation of the 30 percent interest rate, which both leaders argue is stifling economic growth and job creation in Nigeria.
“Aliko Dangote’s recent outcry against the 30% interest rate highlights my earlier warnings in February about the detrimental effects of the current Federal Government’s monetary policy,” Obi stated on Thursday via X.
On Tuesday, Dangote, Chairman and CEO of the Dangote Group, voiced his concerns at the National Manufacturing Policy Summit in Abuja. “No one can create jobs with a 30% interest rate.
This will hinder growth, power, prosperity, affordable financing, and development,” he emphasized.
Read Also:
These comments come after the Central Bank of Nigeria’s Monetary Policy Committee decided to raise the Monetary Policy Rate for the third time, from 24.75 percent to 26.25 percent.
Obi further elaborated on Thursday, citing Dangote’s assertion that such high rates prevent job creation and economic growth.
He recalled his opposition to the Monetary Policy Committee’s decision in February to raise the Monetary Policy Rate to 22.5 percent and the Cash Reserve Ratio to 45 percent, predicting that these increases would push loan interest rates above 30%, making borrowing and repayment difficult for manufacturers and MSMEs.
Highlighting data from the Manufacturing Association of Nigeria, Obi noted, “In 2023, 767 companies shut down and 335 became distressed. Capacity utilization in the sector has dropped to 56%.
” He warned of broader economic implications, stating, “These harsh economic policies, both monetary and fiscal, are slowing our economic growth, driving multinationals out of the country, stifling small businesses, and discouraging foreign direct investment.”
