Peter Obi backs Dangote, says monetary, fiscal policies slowing economic growth

Peter Obi, presidential candidate of the Labour Party in the 2023 election, says the current monetary policy is slowing economic growth.

In a post on X on Thursday, Obi said the recent outcry of Aliko Dangote, chairman of Dangote Industries Limited, supports his earlier criticisms of the negative effects of the monetary policy of the Central Bank of Nigeria (CBN).

On July 2, Dangote said the increase of interest rate to almost 30 percent by the CBN will stifle growth. 

He added that the country is battling “a very high” interest rate.

The monetary policy committee (MPC) of CBN, on May 21, raised the monetary policy rate (MPR) — on which banks benchmark their interest rate — from 24.75 percent to 26.25 percent.

Obi said the negative impacts of the policy on micro, small and medium enterprises (MSMEs), which are the engine of economic growth, are significant.

“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,” Obi said.

“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 on MPR to 22.5% and CRR to 45% increases which, in my opinion, would further worsen the economic situation, as the increases would push interest rates on loans to above 30%, which would be very difficult for manufacturers and MSMES to borrow and repay.

“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 had 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 utilisation in the sector has declined to 56%; the interest rate is effectively above 30%; foreign exchange to import raw materials and production machine inventory of unsold finished products has increased to N350 billion and the real growth has dropped to 2.4%.”

The former Anambra governor said these harsh economic policies, both monetary and fiscal, have persistently slowed down economic growth, driven multinationals out of the country, stifled small businesses and discouraged the inflow of foreign direct investment (FDI).

He urged the government to reverse the “ugly trend” causing job losses, discouraging production, and hindering movement from consumption to production.

Obi said the government must reverse course and implement policies that foster growth and the creation of a new Nigeria.