July 3rd, 2024
Business mogul, Aliko Dangote, yesterday highlighted a major impediment to job creation and speedy economic growth in the country.
He said the high interest rate could discourage investment and hamper economic growth.
Dangote, president of the Dangote Industries Limited, warned that the 26.25% interest rate fixed by the Central Bank of Nigeria (CBN) would incapacitate the manufacturing sector and make it more difficult for the economy to grow.
The eminent businessman delivered a keynote address at the opening of a 3-day National Manufacturing Policy Summit organised by the Manufacturers Association of Nigeria (MAN) at the State House Conference Centre, Abuja.
At the conference, Vice-President Kashim Shettima, who chaired the National Economic Council (NEC), reiterated Federal Government’s determination to team up with MAN to fashion out an actionable roadmap and policy framework for the sector.
In May, the CBN raised interest rate from 24.75 per cent to 26. 25 per cent.
Dangote said businesses could not not cope with the current rate, adding: “Nobody can create jobs with an interest rate of 30%. No growth will happen.”
He also decried the penchant for importation of goods and services, saying it was a harbinger of poverty.
Dangote said: “Import dependence is equivalent to importing poverty and exporting jobs. No power, no growth, no prosperity. Similarly, no affordable financing, no growth, no prosperity. There is no industrialization without protection. Ignoring these facts is what gives rise to insecurity, banditry, kidnapping and abject poverty.”
He urged government to rethink its industrialization policy and provide necessary support and protection to the manufacturing sector, emphasizing that industrialization was key to sustainable economic growth and development.
Dangote highlighted the importance of manufacturing in driving economic diversification, job creation, and foreign exchange generation.
He said the manufacturing sector had declined over the years, resulting in significant import dependence and poverty.
Dangote cited examples of how Asian countries achieved industrialization by protecting and supporting local companies, attracting foreign investment, and creating competitive industries.
He maintained that government’s protection and support were crucial for the long-term survival and growth of industries, citing the success of Nigeria’s cement industry as an example.
Dangote stressed: “There are, no doubt, many causes for failure of our manufacturing sector to meet the expectations of our people. Let me use a personal example to illustrate.
“It is now an established fact that industrialisation is an inescapable route to sustainable and inclusive economic growth and human development.
“I believe we all know the critical role that manufacturing plays in the modern economy, especially its impact on other sectors through various linkages; job creation; economic diversification & FX generation; government revenues; technology transfer/adaptation and Innovation.
“Manufacturing remains a key driver in a nation’s quest for economic development and self-sufficiency. It is easy to determine the level of economic development, growth, and wellbeing of a nation by observing its manufacturing sector.
“It is evident that the strength of a country’s manufacturing sector determines its capacity to compete in global trade of which 70% is in manufactured goods, according to available statistics.
“Countries that have industrilised and have a robust manufacturing sector and are able to export manufactured goods are generally able to grow their economies through global trade.”
Nigeria needs industrial roadmap, says Shettima
Shettima said: “I implore us all to leverage this summit to develop an actionable roadmap and policy framework, ready for immediate implementation, to create the changes we want in the manufacturing sector. I assure you that we shall always maintain an open-door policy to accommodate your needs and expectations.”
The Vice-President called for prioritisation of local content and promotion of made-in-Nigeria products, noting that Executive Order 003 which made the patronage of locally manufactured products mandatory was still in effect.
He said: “Let us be reminded that we cannot achieve significant progress in our drive for industrialisation unless we deliberately promote the production of capital goods. We must be focused on expanding our production base, prioritizing local content, and promoting made-in-Nigeria products.
“I want to assure you that Executive Order No 003 – Support for Local Content in Public Procurement by the Federal Government, which mandates the patronage of locally manufactured products is still in effect. The relevant government Ministries, Departments, and Agencies (MDAs) are mandated to fully comply with the order.”
Shettima said Nigeria had no better option than to support its indigenous firms to produce locally and increase their capabilities.
Former Minister of Finance, Olusegun Aganga, urged the government to declare manufacturing a national priority sector.
He pointed out that the mere possession of natural resources did not guarantee national wealth.
Aganga said: “What makes a country rich is what it does with its resources.”
He called for a shift from peasant farming to commercial agriculture and from artisanal mining to attracting major miners.
Aganga also called for the elimination of excessive customs duties, levies, and overlapping regulatory mandates to boost the manufacturing sector.
At the summit were the Minister of Finance and Coordinating Minister for the Economy, Wale Edun; Director-General of National Agency for Food and Drug Administration and Control (NAFDAC), Mojisola Adeyeye; Comptroller-General of Nigeria Customs Service, Adewale Adeniyi; Permanent Secretary in the Ministry of Industries, Trade and Investment, Ambassador Nura Rimi; government appointees, senior manufacturing executives, and members of the diplomatic corps.
