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Federal Government Must Act on High Interest Rates to Avoid Economic Decline, Warns Dangote

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Aliko Dangote - Investors King

In a powerful address at the ongoing summit organized by the Manufacturers Association of Nigeria (MAN), Africa’s richest man, Aliko Dangote, issued a stark warning to the federal government about the pressing need to reduce the country’s soaring interest rates.

Dangote explained that the current high-interest environment is stifling business growth and leading to widespread factory closures, which could plunge Nigeria into economic decline.

Dangote, who delivered the keynote address, stated the detrimental effects of the high interest rates, which are currently around 30 percent or more in banks.

“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,” Dangote stated.

The Central Bank of Nigeria (CBN) recently raised the monetary policy rate to 26.25 percent, with banks lending at rates as high as 35-40 percent to businesses. These hikes are intended to control inflation and stabilize prices.

However, Dangote argued that these measures are counterproductive, causing more harm than good to the economy.

Highlighting the impact on the manufacturing sector, Dangote noted that Nigeria’s manufacturing exports accounted for less than 5% of its merchandise export in 2022.

In stark contrast, countries like China and South Korea have manufacturing export percentages as high as 93%.

“There is evidence that the strength of a country’s manufacturing sector determines its capacity to compete in global trade. Countries that have industrialized and have a robust manufacturing sector can grow their economies through global trade,” he explained.

Dangote warned that unless urgent steps are taken to address these economic issues, Nigeria risks becoming a mere trading hub, reliant on imports rather than fostering local manufacturing and production.

This import dependence is one of the greatest challenges to Nigeria’s industrial growth and development, he added.

The report presented at the summit by MAN revealed that about N3 trillion was spent on importing raw materials in 2023.

The report called for market expansion, cost reduction, improved logistics, and better environmental social and governance (ESG) practices.

Furthermore, the report recommended several measures to revitalize the manufacturing sector, including increasing budgetary allocations for infrastructure at industrial hubs, promoting made-in-Nigeria products, encouraging foreign direct investment (FDI), avoiding multiple taxation, and implementing energy sector reforms.

“Inflation and the core macroeconomic metrics have significantly impacted the sector, with inflation rising from 14% in 2018 to 33.9% currently. The unification of the exchange rate in 2023 also had a negative impact, with many losing their jobs,” the report stated.

The report also highlighted the need for government intervention to provide tax holidays, subsidies, and the development of industrial parks.

It highlighted the successful strategies of other countries, such as South Africa’s promotion of locally produced goods, Egypt’s creation of special economic zones, and Malaysia’s focus on a high-tech economy.

Concluding his address, Dangote stressed the urgency of the situation. He said “We don’t just want this country to be a place of buying and selling without producing anything. This is dangerous for us. The federal government must act now to reduce interest rates and create a conducive environment for businesses to thrive. Only then can we hope to avoid economic decline and ensure a prosperous future for Nigeria.”

As the summit continues, stakeholders are hopeful that Dangote’s passionate appeal will spur the government into action, paving the way for significant economic reforms and a brighter future for Nigeria’s industrial sector.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Peter Obi Advocates for Full Government Backing of Dangote’s $21bn Refinery Project

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Peter G. Obi

Peter Obi, a prominent Nigerian politician and public figure, has called for unwavering support for the Dangote Refinery amid recent conflicts between Dangote Industries and government agencies.

In a passionate appeal, Obi said the current disputes extend beyond political and personal differences, touching upon the broader interests of Nigeria’s economy and its future prosperity.

In his statement on X.com, Obi highlighted the refinery’s immense potential to drive economic growth and create employment opportunities.

With an estimated annual revenue potential of approximately $21 billion and the capacity to generate over 100,000 jobs, the Dangote Refinery represents a cornerstone of Nigeria’s industrial advancement and economic stabilization.

“The recent challenges faced by Dangote Industries should not overshadow the vital role this enterprise plays in our national economy,” Obi asserted.

“Alhaji Dangote’s contributions are monumental, and it is essential that we rally behind his ventures, particularly the refinery, which is set to make a significant impact on our fuel crisis and foreign exchange earnings.”

The refinery, with its strategic importance, stands as a beacon of hope for Nigeria’s fuel supply and overall economic development.

It is poised to address long-standing issues in the energy sector, provide substantial revenue streams, and enhance the country’s economic resilience. Given these benefits, Obi stressed that any actions hindering the refinery’s operation would be counterproductive.

Obi also commended Alhaji Dangote for his remarkable achievements across various sectors, including cement, sugar, salt, fertilizer, infrastructure, and more.

“Alhaji Dangote embodies patriotism and commitment to Nigeria’s growth. His extensive industrial activities are not only a testament to his entrepreneurial spirit but also a vital contribution to Nigeria’s economic landscape,” he added.

Despite the challenging business environment, Dangote’s diversified industrial investments demonstrate a commitment to Nigeria’s industrialization and job creation.

Obi urged the Federal Government and its agencies to offer full support to Dangote Industries, recognizing the broader economic benefits and the positive impact on national welfare.

“The success of Dangote Industries is intrinsically linked to the success of Nigeria and Africa as a whole. We cannot afford to let such a crucial enterprise falter,” Obi warned. “Every sensible and patriotic government should view enterprises like Dangote Industries as national treasures that deserve robust support and protection.”

Obi’s appeal underscores the critical need for collaboration between the government and private sector leaders to ensure the successful operation of key projects like the Dangote Refinery.

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Dangote Accuses NNPC and Oil Traders of Secret Operations in Malta

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Aliko Dangote, chairman of Dangote Industries Limited, has leveled serious allegations against personnel from the Nigerian National Petroleum Company (NNPC) Limited and certain oil traders.

Speaking at a session with the House of Representatives, Dangote claimed that these parties have established a blending plant in Malta, raising concerns about the integrity of Nigeria’s fuel supply.

Dangote described the blending plant as lacking refining capability, instead focusing on mixing re-refined oil with additives to produce lubricants.

“Some of the terminals, some of the NNPC people, and some traders have opened a blending plant somewhere off Malta,” he stated.

He emphasized that these activities are well-known within industry circles.

Addressing the drop in diesel prices, Dangote argued that locally produced diesel, with sulfur content levels of 650 to 700 parts per million (ppm), is superior to imported variants.

He linked numerous vehicle issues to what he described as “substandard” imported fuel.

He called for the House of Representatives to set up an independent committee to investigate fuel quality at filling stations.

“I urge you to take samples from filling stations and compare them with our production line to inform Nigerians accurately,” Dangote insisted.

The accusations come amid an ongoing dispute between the Dangote Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Farouk Ahmed, NMDPRA’s chief executive, had previously claimed that local refineries, including Dangote’s, were producing inferior products compared to imports.

Also, the House of Representatives has initiated a probe into allegations that international oil companies are undermining the Dangote Refinery’s operations.

In response to the escalating tensions, Heineken Lokpobiri, the Minister of State for Petroleum Resources, intervened by meeting with key stakeholders including Dangote, Ahmed, and other top officials from the Nigerian petroleum regulatory bodies.

The discussions aimed to address claims of monopoly against Dangote, which he has strongly denied, and to ensure that all parties operate transparently and fairly.

This development highlights the complex dynamics within Nigeria’s oil industry. The allegations and subsequent investigations could impact market stability and investor confidence.

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Africa’s Richest Man, Aliko Dangote Ready to Sell Refinery to Nigerian Government

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Dangote refinery

Aliko Dangote, Africa’s wealthiest entrepreneur, has announced his willingness to sell his multibillion-dollar oil refinery to Nigeria’s state-owned energy company, NNPC Limited.

This decision comes amid a growing dispute with key partners and regulatory authorities.

The $19 billion refinery, which began operations last year, is a significant development for Nigeria, aiming to reduce the country’s reliance on imported fuel.

However, challenges in sourcing crude and ongoing disputes have hindered its full potential.

Dangote expressed frustration over allegations of monopolistic practices, stating that these accusations are unfounded.

“If they want to label me a monopolist, I am ready to let NNPC take over. It’s in the best interest of the country,” he said in a recent interview.

The refinery has faced difficulties with supply agreements, particularly with international crude producers demanding high premiums.

NNPC, initially a supportive partner, has delivered only a fraction of the crude needed since last year. This has forced Dangote to seek alternative suppliers from countries like Brazil and the US.

Despite the challenges, Dangote remains committed to contributing to Nigeria’s economy. “I’ve always believed in investing at home.

This refinery can resolve our fuel crisis,” he stated, urging other wealthy Nigerians to invest domestically rather than abroad.

Recently, the Nigerian Midstream and Downstream Petroleum Regulatory Authority accused Dangote’s refinery of producing substandard diesel.

In response, Dangote invited regulators and lawmakers to verify the quality of his products, which he claims surpass imported alternatives in purity.

Amidst these challenges, Dangote has halted plans to enter Nigeria’s steel industry, citing concerns over monopoly accusations.

“We need to focus on what’s best for the economy,” he explained, emphasizing the importance of fair competition and innovation.

As Nigeria navigates these complex issues, the potential sale of Dangote’s refinery to NNPC could reshape the nation’s energy landscape and secure its energy independence.

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