Peter Obi, the Labour Party’s presidential candidate in the 2023 election, has voiced concerns over the current monetary policy, claiming it hampers economic growth.
In a Thursday post on X, Obi referenced Aliko Dangote’s recent remarks, highlighting the negative consequences of the Central Bank of Nigeria’s (CBN) monetary policy. On July 2, Dangote, chairman of Dangote Industries Limited, criticized the CBN’s interest rate hike to nearly 30 percent, warning it would hinder growth and exacerbate the already high interest rates in the country.
On May 21, the CBN’s monetary policy committee (MPC) raised the monetary policy rate (MPR) from 24.75 percent to 26.25 percent, which affects how banks set their interest rates. Obi emphasized the detrimental effects of this policy on micro, small, and medium enterprises (MSMEs), crucial drivers of economic growth.
Obi stated, “Africa’s foremost entrepreneur and respected Nigerian businessman, Aliko Dangote’s recent outcry against the current interest rate of 30%, underscores my earlier concerns about the adverse effects of the current monetary policy.” Dangote had expressed that such high-interest rates would stifle job creation and economic growth.
Obi reiterated his opposition to the MPC’s February decision to increase the MPR to 22.5% and the cash reserve ratio (CRR) to 45%, predicting it would push loan interest rates above 30%, making it difficult for manufacturers and MSMEs to secure and repay loans.
“If Dangote, Africa’s richest person and a leading industrialist, is raising concerns, the impact on MSMEs, which drive economic growth, is unimaginable,” Obi continued.
He pointed to a recent report from the Manufacturing Association of Nigeria (MAN) showing that in 2023, 767 companies shut down, and 335 became distressed. Capacity utilization in the sector fell to 56%, the effective interest rate exceeded 30%, foreign exchange for importing raw materials and production machinery increased to N350 billion, and real growth dropped to 2.4%.
The former Anambra governor criticized these harsh economic policies, both monetary and fiscal, for slowing down economic growth, driving multinationals out of the country, stifling small businesses, and discouraging foreign direct investment (FDI). He called on the government to reverse these policies, which are causing job losses, discouraging production, and hindering the transition from consumption to production, advocating for policies that promote growth and a new Nigeria.
