NEWS

NO ECONOMIC GROWTH WILL HAPPEN WITH 30% INTEREST RATE - ALIKO DANGOTE OBSERVES

 
The President of Dangote Group Industries Ltd, Alhaji Aliko Dangote has stated that no economic growth will happen unless Bank Interest Rate at 30% declines.

He stated this while delivering keynote address during Manufacturers Association of Nigeria (MAN), 2024 summit in Abuja.

According to him, the cause of the inflation in major advanced economies in Europe and the United States which necessitated interest rate hikes was different from that of developing countries mostly in Africa.

Central Bank of Nigeria (CBN) since the beginning of this year has hiked interest rates by a combined 750 basis points over three consecutive Monetary Policy Committee (MPC) meetings. Over the past three MPC meetings, interest rates have risen from 18.75% to 26.25%.

Stakeholders in the Business Committee have questioned the effectiveness of MPR hike at taming inflation stating that it hurts the real economy by increasing the cost of accessing capital.
 
Tracing the cause of inflation in North America and Europe to cash transfer program implemented by governments during the pandemic period in 2022, Aliko Dangote stated that in total, about $18 trillion was disbursed to individuals and businesses during the period.

Dangote noted that nothing of such significance happened across economies in Africa.

Speaking at the event, he noted “Mr. Vice President, I know that today we are battling with very high interest rates. This interest rate is now saying that we should fight inflation. I’m not an economist, I’m just a local businessman. The other countries, why did they jack up interest rates during COVID-19, the G7 countries pumped money into their economies to the tune of 18.9 trillion. So in their economies, there was so much of money chasing few goods. This means that everything is going to go up.”

“During COVID, we didn’t do anything at all. The only thing we did was food palliative and I’m talking about Africa in general. Right now, at 30%, there is no way anybody can create jobs because we are actually stifling growth. So interest rate can remain at 30% but no growth will happen unless that interest rate comes down”

Furthermore, Alhaji Dangote called for the protection of local industries, especially in manufacturing, across the country and further traced the decline of the manufacturing sector in the country since the 1970s.

Dangote believes the only way to attract foreign direct investment is local investment and provided examples of how countries who voice the rhetoric of free trade actively enact policies to promote their local industries to become national treasures from the West to China and India.

He said, “Mr. Vice President, I know that today we are battling with very high interest rates. This interest rate is now saying that we should fight inflation. I’m not an economist, I’m just a local businessman. The other countries, why did they jack up interest rates during COVID-19, the G7 countries pumped money into their economies to the tune of 18.9 trillion. So in their economies, there was so much of money chasing few goods. This means that everything is going to go up.”

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