Opinion

From Cementing Poverty To Oiling Its Wheels ?

Published

11 months ago

June 9, 2023

President Bola Ahmad Tinubu

Hamisu Hadejia,PhD

Endowed with vast deposits of limestones, ‘why would Nigeria be spending millions of dollars importing cement from abroad?’. This was the question that agitated the mind of Nigeria’s former president Olusegun Obasanjo (OBJ) in the early 2000s, leading to the former president summoning the major cement importer at the time, Mr Aliko Dangote, to brainstorm on sorting out the puzzle.

A policy seeking to incentivise cement importers to start local cement manufacture, known as the backward integration policy (BIP), was consequently introduced in 2002, following the private conversations between OBJ and Dangote.

As a sectoral industrial policy, the BIP made the grant of cement import licenses conditional on cement importers demonstrating concrete commitment to set up local cement producing factories. The strategy was to phase out, before completely banning, cement importation when local factories could produce enough to replace imports—a strategy known in economics as ‘import substitution policy’.

Among other incentives, the BIP ensured the sales of foreign exchange (dollars) to cement entrepreneurs especially Dangote at the official rate. For example, in a Reuters report, Dangote was said to have secured $161 million at the official exchange rate (of between 197 to 199 NGN per 1 USD) from the Central Bank of Nigeria (CBN) between March and May 2016. If Dangote were to (and he could without any accountability) re-sell this $161 million foreign exchange award in the currency black market, he would have made a profit of $100 million (£68 million) without lifting a finger. Thus, effectively, what this means is that just in a couple of months, the Nigerian government had subsidized Dangote to the tune of $100 million US dollars with taxpayers’ money, under the guise of supporting ‘strategic’ businesses.

Not only that, VAT/custom duty waivers on imported cement making equipment, credit guarantees, and a cumulative tax holidays of seven years were granted to Dangote Cement Companies (DCC).

Government’s support to infant firms, industries or entrepreneurs is not a new phenomenon in nations’ industrialization processes. Economists such as Alexandre Hamilton (1757-1804), Friedrich List (1789-1846), and contemporary ones like Ha-Joon Chang and Eric Reinert, have documented evidence confirming that these kinds of supports or state-business relations were instrumental to the industrialization of almost all industrialized nations of Europe, North America, and East Asia. However, the state-business relations in Nigeria especially in the cement industry deserves some critical reflections and re-evaluations for social welfare considerations.

THE PROS OF THE BIP

Within a little over a decade, the BIP succeeded in replacing cement imports with local production in Nigeria leading to the complete ban on importation of cement in 2012. Hence, government officials and industry players have never failed to flaunt the BIP policy as a national feat all patriotic Nigerians should celebrate. The bases for this conclusion are three: One, the policy has made Nigeria self-sufficient in cement production; two, it has created jobs opportunities; three, it saves Nigeria foreign exchange which, at the peak of import in 2008, was $304 million. While these ‘successes’ have been belaboured time and again, Nigerians have been deliberately left in the dark as to the costs of these achievements, which include, but are not limited to, the disproportionately lavish state incentives to cement investors as adumbrated above.

THE CONS OF THE BIP

The ban on cement imports and the dominance of a single player in Dangote gave rise to a monopoly, now duopoly, in the cement industry. Latching on to the opportunity, Dangote has used every trick in the book to initially eliminate competition (e.g., the case of Clestus Ibeto), charge exorbitant prices, and pay the state less than its due in taxes. Any evidence for these claims? Yes, there are plenty! For a start, it is a fact that the Nigerian cement consumers now buy a 50kg bag of cement at almost $10 (official rate). This is outrageously higher than what obtains in other markets including in many African countries, to some of which Dangote merely exports the clinkers he processes in Nigeria using Nigeria’s limestones for final processing and sales in those countries at prices lower than he sells in Nigeria! In fact, compared to its price in Nigeria, a 50kg bag of cement costs lower in China ($2.96), Malaysia ($2.3), India ($3.84), Kenya ($5.56), Zambia ($6.45), Egypt ($2.88), South Africa ($5.88), and Ghana ($7.0).

Also, some evidence suggests that the Nigerian state does not get actual value for the lavish incentives it splashes on Dangote. In the DCC’s 2016 annual report (p.139) for example, the company’s own independent auditors have pointed out that the company’s directors had made an ‘assumption’ about the pioneer statuses of different lines of productions at Ibese and Obajana factories. Without this ‘assumption’, the auditors concluded that:
“..an additional tax charge of N64.4 billion (2015: N40.0 billion) would have been incurred by the company if this assumption was not made in determining the tax liability.”

So, while the Nigerian state has subsidised Dangote generously, such efforts do not appear to have yielded benefits for both the state (which is not paid what is due to her in taxes) and Nigerian cement consumers (who buy cement at over 300% price differentials compared to other consumers elsewhere).

Moreover, with the cement manufacturing process being highly mechanised, the much-vaunted jobs created by the transformation of the industry is, in the final analysis, not worth the costs incurred from subsidization and the expensive cement prices Nigerians pay. For instance, the entire cement industry currently employs only around 30,000 workers directly, and most of these workers are truck drivers. Hence, it does not make any economic sense for Nigeria to, in a bid to keep a few thousand Nigerians in employment, sacrifice national housing needs/infrastructural development by forcing millions of Nigerians to pay extortionary cement prices. Dangote and other players in the industry cannot of course claim credit for the indirect jobs in the downstream retail segment of the industry because such jobs have been there and would still remain regardless of whether cement in produced locally or imported.

But how has Dangote managed to ‘cement’ his cake and eat it? The answer to this crucial question lies in understanding the nature of two domains of relations, that is: The Dangote-government relations as well as his public or civil society management relations.

Dangote-state relations took off in earnest towards the end of the OBJ first term, that is around the time the BIP was introduced. In his book, ‘The Accidental Public Servant’, Mallam Nasir El-Rufai, explained that Dangote came close to the OBJ government after the former president had fallen out with his powerful vice and major Peoples Democratic Party (PDP) financier at the time, Atiku Abubakar. Consequently, according to El-Rufai, “Obasanjo had to resort to raising money from other sources and that was how Aliko Dangote came into prominence in the government.”

A document from the US embassy in Nigeria leaked by Wikileaks would later reveal that “Dangote purportedly contributed 200 million naira (about $1.5 million at the time) to Obasanjo’s first term election campaign, and in 2003 at least another 1 billion naira (about USD 7.5millio) for the second term. Dangote is a known contributor to the PDP party.” The cable therefore concluded that, ‘it is no coincidence that many products on Nigeria’s import ban lists are items in which Dangote has major interests.’ Former President Yar’Adua of blessed memory saw through this kind of Dangote’s much-vaunted ‘entrepreneurial acumen’ and moved to free poor Nigerian cement consumers from the monopolistic exploitation before the cold hands of death cut him short. Ever since, the business continues with successive regimes securely holding the cement cash cow by the horns for Africa’s ‘entrepreneurial guru’ to milk in exchange for God knows what.

It is instructive to point out here that across the globe, investment in the cement industry takes between 20-30 years to deliver returns. However, in Dangote’s case, returns were delivered in less than a decade. To be clear, no one should begrudge Dangote his fundamental economic right to capital accumulation, however, such private economic right should also not be enjoyed at the social cost of denying Nigerians their fundamental right to housing through extortionary pricing of a product that their own state subsidizes, disproportionate to the social benefits for that matter.

Also, across the globe, profit margins in cement companies range between 30-40%, yet, in Nigeria it is up to 63%! This is because a couple of Nigerians gifted with ‘entrepreneurial acumen’ have the wherewithal to ‘lobby’ state officials to protect the market for them to charge whatever price they fancy. In a paper, Richard Itaman and Christina Wolf calculated that between 1999 and 2010, when cement import was severely restricted before its eventual ban, the Nigerian cement consumers, on average, lost N19.63 billion (that is, around $51.4 million in 2021 USD/Naira value) per year because of buying cement at exorbitant prices compared to the rest of the world. In fact, during the same period, Richard and Christina observed that cement prices had progressively increased by up to 300%.

In addition to ‘lobbying’ the political leadership, Dangote, as investigations by Michael Odijie and Anthony Onofua reveal, ensures the extraction of massive rents in the industry without any opposition from any quarters through his patron-clientelist relations with, and alleged infiltration of, trade/labour union and public/civil society organizations. The authors observed that Dangote generously ‘donate’ to the activities of these civil society groups with a view to ‘promoting the [BIP] policy as a major success.’. The authors stated that he installed his allies in the leadership of critical trade organizations such as the Manufacturers’ Association of Nigeria (MAN). Incessant ‘donations’ and yearly ‘gifts’ to such organizations as the National Association of Block Moulders of Nigeria and Trade Union Congress have also been attributed to silencing the voices of comrades who were hitherto vehement campaigners against extortionary cement pricing. Michael and Anthony have also observed trends in the co-optation of the media to popularise the narrative that local cement manufacturing is a collective national ‘success’.

THE WAY FORWARD

The new administration of President Bola Tinubu will do well by moving in the interest of impoverished Nigerians to address this cement issue decisively. Nigeria should not continue to protect a couple of producers at the expense of millions of Nigerian cement consumers. According to former minister of finance, Mrs Zainab Ahmed, ‘the Federal Government will require about $100 billion annually for the next 30 years to effectively tackle Nigeria’s infrastructure challenges.’ Also, the United Nations remarked that “Nigeria’s housing sector is in a complete crisis”. Undoubtedly, a critical part of addressing these challenges/crises is by making cement prices affordable to Nigerians. How can this be done? In my view, since the cement producers have been protected and subsidized for longer and larger than necessary, it is time for the cement market to be completely liberalized to allow for imports. This will facilitate competition which will beat prices down and ease the excruciating economic hardship of Nigerians. This is elementary economics. Even if local manufacturers who have been mollycoddled for over a decade fail to compete, so be it! The social benefits of suspending the long imports ban far outweigh the largely private benefits of sustaining it. The benefits of promoting indigenous private capital accumulation or keeping less than 30,000 largely truck-drivers’ jobs are not worth making millions of Nigerians homeless in their own fatherland. So, President Tinubu has a choice to make between appeasing a couple of capitalists/cronyists or salvaging millions of poor Nigerians who have no roof over their heads.
Dangote’s refinery: Like cement, like oil?
In celebrating the construction/commissioning of “world’s largest single-train petroleum refinery” without asking some critical questions, we, Nigerians, appear to have given in more to our sentiment than to our rationality. According to the Central Bank of Nigeria (CBN)’s governor, Mr Godwin Emefiele, who according to Dangote “moved mountains to ensure the success of [his refinery] project”, the apex bank ensured the availability of foreign exchange to Dangote to pay for equipment imported for his $19.5 billion refinery. What amounts of this scarce foreign exchange was sold to Dangote? What other monetary and fiscal incentives have been provided to the entrepreneur for the refinery project, and under what terms and conditions? Will all imports of refined oil and assorted products henceforth be banned for Dangote to enjoy another monopoly status in the oil industry, like he does in cement with all its concomitant consequences? Is the 20% Nigerian National Petroleum Corporation (NNPC)’s stakes in Dangote’s refinery a bait, decoy, or marriage of convenience to attract state patronage for profiteering business as usual?
Hamisu Hadejia (PhD)

Opinion

Why They Are Afraid Of Ganduje

Published

2 days ago

April 23, 2024

Nigerian Tracker

By Abubakar Umar

While preparing to pen this write up I just scrolled the news and read that the Kano High court that ordered the suspension of the APC National chairman Dr Abdullahi Umar Ganduje have vacated the order pending the determination of the suit on 30th April.

From the look of things and with his glowing political clout since he joined politics in the second Republic Dr. Abdullahi Umar Ganduje the former Governor of Kano state is giving sleepless nights to many politicians particularly from his home state of Kano where the melting pot of Nigerian politics emanated from.

No vex his emergence as the National chairman of Nigerias ruling party has brought down the evil machinations of some politicians who sees Dr Abdullahi Umar Ganduje as a stumbling block to their political ambition at the national stage .

The administrator cum politician as many people will attest to knew very well that interms of experience and political calculations he has no match especially from the North West political zone where the National chairman hails from .

They know very well that the national working committee of the party and President Asiwaju Bola Ahmad Tinubu have done the right calculation by placing an elder politician and a two term Governor of the most difficult state to Govern in the whole Nigeria as the chairman of the Nigerian ruling party.

They knew very well that his stature has made him one of the most visible and hardworking APC National chairman since its formation in the year 2013.

The conscripted script being played by agents of destabilzation in order to make the ruling party irrelevant can only be done if they try to use some political zealots with the aim of making the National Chairman look like someone who can not sail through their evil conspiracy .

It was understood that the only way the NNPP Governent in Kano will change it’s political nest is to cut down the tree that is supposed to give it a shade but instead of humbling themselves and submit themselves to the party’s National Secretariat in which Dr. Ganduje is the leader they starte beating about the bush like a child’s play.

Dr.Ganduje had since humbled them politically and by visiting the state on January 25 ,2024 to invite them to the ruling party without vengeance .

He extended the hand of friendship that politics is is the ability to make sacrifices and compromise .

It was that compromise and sacrifice that made some of his political foes make accomplishments they never dream to achieve but still they are not grateful with the his sacrifice and patience .

Today the courts have vindicated by Dr.Abdullahi Umar and the APC national stalwarts across the country who are comfortable with the leadership style of Dr.Abdullahi Umar Ganduje.

Opinion

Celebrating Emir Sulu -Gambari at 84

Published

3 days ago

April 22, 2024

Nigerian Tracker

Alhaji Ibrahim Sulu Gambari ,Emir Of Ilorin

By AbdurRaheem Sa’ad Dembo

Today the highly revered Emir of Ilorin, Alhaji (Dr) Ibrahim Sulu -Gambari CFR marks 84 years birthday.The former Jurist ascended the throne of his forefathers on Monday and he was also born on Monday. What a coincidence!

Being alive up to the age of 84 is a rare opportunity for anyone who really appreciate the homongous favour of the Almighty.The Chancellor of Bayero University Kano is an example of an Emir with a digital disposition and inclination.He believes so much in the progress of individuals and the entire Ilorin Emirate.

Dwelling so much about his career as a retired Justice of Court of Appeal may not be necessary as many are aware of it.The Emir stands out as a man who had made Ilorin as a City to move away from the old ways of doing things even in terms of education. He has encouraged scholarship in all ramifications. Be it in Islamic perspective and western education. Emir Sulu Gambari is the first University graduate to have ascended the throne in more two centuries of Ilorin Emirate history .

Before his ascension to the throne of his progenitors, Ilorin had a handful of professors but today they’re as many as possible.He has achieved a lot but you know traditionally such may not be made public.

Mai Martaba has provided purposeful and impactful leadership, this can be captured in the words of Abubakar Imam, the National Secretary of Ilorin Emirate Descendants Progressive Union IEDPU thus:

“The Emir has always taken care of the welfare and wellbeing of the ordinary people of his Emirate in words and actions. For instance, he initiated a Fund through which money was raised to address the immediate needs of the downtrodden people and residents of the community. The Fund was chaired by the Danmansani of Ilorin, Engr Sulaiman Ayinde Yahaya Alapansanpa, FNSE, while the immediate past National President of IEDPU, Alhaji Aliyu Otta Uthman, fsi, was the Alternate Chairman. Over 15,000 individuals from all the nooks and crannies of Ilorin Emirate benefited from the Fund during the course of the perilous COVID-19 epidemic, which rocked the humanity about five years ago. It will also be recalled that the Emir purchased 400 bundles of corrugated iron sheet, which was distributed to the less privileged members of the community who were affected by a devastating rainstorm in 2021. The then IEDPU President was given the task of getting the item delivered at the footsteps of the victims of the natural disaster”

Before the coming of Emir of Ilorin, University of Ilorin was not a place an Ilorin indigene can gain admission into easily.In fact, only few had opportunity to school there at that time.But Emir Sulu -Gambari and other stakeholders ensured that an indigenous Vice Chancellor was giving opportunity to lead the Ivory tower for the first time,in person of Professor Shuaib Oba Abdulraheem, the Talba of Ilorin Emirate .May Allah continue to grant Professor good health and plenty baraka. Professor Oba cannot even mention all those he has assisted, because the numbers are huge.

Today, there is fairness in the issue of admission into university of Ilorin.The standard was established by the administration of Professor Shuaib Oba Abdulraheem and has been sustained by his successors.

Eminent sons and daughters of Ilorin Emirate are already sending their warmest messages to the Emir.

Kwara State Governor AbdulRahman AbdulRazaq has rejoiced with the Emir of Ilorin and Chairman of Kwara state traditional rulers Council

The Emir, according to the Governor, “has remained a father to all while also deploying his rich experiences and networks to support not just the people of the Ilorin Emirate but also the people of the state as a whole.

The Governor prays to Allaah to give His Royal Highness good health and long life, and continue to uphold him upon goodness in his service to the people of the Emirate”

The Turaki of Ilorin Emirate and Senator representing Kwara Central senatorial district, Senator Saliu Mustapha has also congratulated the His Royal Highness, Alhaji (Dr) Ibrahim Sulu-Gambari CFR, on the occasion of his 84th birthday anniversary

Senator Mustapha described the revered Emir who is a retired eminent jurist as “an ambassador of peace with an admirable style of leadership”

He affirmed that since the respected monarch’s ascension to the throne of his forefathers in 1995 as the 11th Emir of Ilorin, he has brought a lot of development and glamour to the entire State.

While extolling the emir’s humility and modernized vision for his domain and the country at large, Senator Mustapha prays God Almighty to grant the royal father more years of worthy service to his people and humanity in good health.

Furthermore,Honourable Mukhtar Tolani Shagaya representing Ilorin West/Asa Federal Constituency also greeted the Emir “His Royal Highness has exemplified wisdom, compassion, and integrity throughout his reign, serving as a beacon of hope for the people of Ilorin and beyond. His visionary leadership has brought about tremendous growth and development, with a keen focus on fostering unity and inclusivity amongst his subjects. His unwavering dedication to our collective well-being is a testament to his selflessness and genuine concern for his people”

Under his guidance, Ilorin has witnessed a remarkable transformation, with strides made in education, healthcare, infrastructure, and socio-economic development. His Royal Highness’s commitment to fostering a harmonious and prosperous society has played a pivotal role in shaping the Ilorin of today – a thriving community that takes pride in its rich cultural heritage while embracing the promise of a brighter future”

Similarly, A former Member of the House of Representatives, Hon. Abdulwahab Oladimeji Issa has felicitated the Emir of Ilorin.He extolled the Emir thus,”his uncommon leadership qualities” and prayed that God grants him many more years of service to the people of Ilorin emirate and Nigeria.

“As you mark your 84th birthday anniversary which comes up today Monday, April 22nd, 2024, I write, on behalf of my family to extend warm felicitations to Your Highness.

“Only recently, you marked twenty-eight years of unquantified success on the throne as the Emir of Ilorin. Your uncommon leadership qualities and evident faith in the peace, unity, progress, and prosperity of the Ilorin emirate and beyond, have combined to make you one of the most highly respected monarchs in Nigeria today.

“As you continue to use your exalted throne to build bridges of friendship and harmony across Kwara state and the nation, it is my prayer that Almighty Allah grants you many more years of abounding health, prosperity, and enduring fulfillment,” he added.

Hajiya Arinola Lawal also felicitates Emir of Ilorin on 84th birthday anniversary,
“I extend my warmest wishes and heartfelt prayers to His Royal Highness, Alhaji Ibrahim Sulu-Gambari, the Emir of Ilorin, on the occasion of his birthday

I beseech Allah to grant His Royal Highness a long and prosperous reign on the throne of his fathers, filled with peace, stability, and blessings for the Ilorin Emirate”

Meanwhile, LT Col Ramat Suleiman also joined the league of prominent Ilorin Emirate sons and daughters to celebrate the Emir Sulu -Gambari at 84.She described the Emir as a father to all and a lover of peace.The first Ilorin Emirate woman to have attained the rank of LT Col in the military extolled the Emir as a leader with great vision and prayed to Allah to grant him good health and more years ahead on the throne of his forefathers.

Professor Shuaib Oba Abdulraheem,Senator Ibrahim Yahaya Oloriegbe, Honourable Moshood Mustapha,Former Senate President, Abubakar Bukola Saraki, Hajiya Tundun Alanamu, Barrister Oba Magaji and others have also greeted the Emir at 84.

By way of conclusion,without mincing words Ilorin Emirate has witnessed tremendous transformation under the leadership of Emir Sulu -Gambari in all facets of the Emirate since his ascension in 1995.I wish the Emir a prosperous, healthy and pious 84th birthday anniversary and more years ahead Insha Allah.

Sheeeehuuuu.Walahu ya’simuka minna nas

abdurraheemsaaddembo@gmail.com

Opinion

For Adamu A Zango:Simple Solution To Your Compounded Problems

Published

4 days ago

April 21, 2024

Nigerian Tracker

Adam A Zango

Tijjani Muhammad Musa

I usually don’t like writing on celebrities except if the issue borders on religious matters. Even so, it’s not any trivial matter that makes my ink flow. For me, talking to stars is like calling on someone who has taken a turn.

But once in a while, I do make an exception when it comes to situations that need prompt intervention towards saving a soul that’s heading to the edge of the abyss. I have succeeded on one or two cases though. AlhamdulilLaah

And lately, with so much misfortunes befalling guys in the Arewa entertainment industry, most especially Kannywood, one can’t help but smell the unpleasant stench in the air, and thus whiff the hand to ward it off.

This brings us to the latest trending issue of Adamu A Zango’s depression crisis. Those concerned about him have been raising alarm on social media of an impending doom that could likely befall him if he is not counselled on time.

Well, it’s that serious. Many say he needs help urgently and beg those who can to approach him and save actor cum musical icon from himself. Those close to him should as a matter of urgency do. For us from afar, we can only submit thus:

The perfect solution to Adamu A. Zango’s problem and dilemma much as some wouldn’t want to hear it can be found in the Holy Qur’an Surah Al-Anbiya (21) verses 83-84 where Allaah SWT Says:

83. And (remember) Ayyûb (Job), when he cried to his Lord: “Verily, distress has seized me, and You are the Most Merciful of all those who show mercy.”

84. So We answered his call, and We removed the distress that was on him, and We restored his family to him (that he had lost) and the like thereof along with them as a mercy from Ourselves and a Reminder for all those who worship us.

Again relate to the same Surah Q21:87-88 which brings forth how Yunus AS was able to free himself from utter hopelessness into Allaah’s Grace and Mercy. Note the Promise of Allaah SWT to grant others who worship Him similar grace if they should repeat same du’a.

So Adamu, first you must prepare your mind by connecting to your Lord, sincerely seeking His Graceful intervention in your matters. How? Sincere repentance is key and subsequently seek for forgiveness for all your bad deeds.

Next abstain from all acts of disobedience to Allaah. Thereafter, perform 2 raka’at of Salah, after which you should engage in DhikrAllaah, reciting the du’a of Ayub AS in Q21:83 and Yunus AS in Q21:87

Finally, form the habit of reciting the Qur’an and listening to it on a regular basis. Always perform your 5 daily obligatory prayers in congregation and keep off anybody or anything that will constitute a distraction to your focus on your developing a close relationship with your Lord Allaah AWJ.

If you can take these few simple, but highly challenging steps and implement them in your life, it is a guarantee that you will be free from all these stresses and distresses to a life of unprecedented peace bi iznilLaah..

But as a Kannywood and Hausa music celebrity, this solution though simple as it may seem might be the most difficult thing for you to adopt. And I believe you know why. And that sadly is where the problem truly lies.

Unless one is ready to embrace a change of lifestyle from his or her norm to Allaah’s laid out norms, things in life will keep challenging their peace and tranquility of the person.

Hope this helps .

Tijjani Muhammad Musa is the chairman Association of Nigerian Authors Kano branch