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From Cementing Poverty To Oiling Its Wheels ?

Published

2 years ago

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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.

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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)

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Opinion

Kaduna State: A Phoenix Rising from the Ashes of Insecurity and Politics” By Zubair Abdurrauf Idris

Published

5 hours ago

on

December 6, 2025

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Despite the maelstrom of criticism and political backlash that has engulfed Kaduna state’s governance under Governor Uba Sani, the latest indices of easing business by the Nigerian Presidential Council PEBEC have catapulted the state to the pole position, nipping at the heels of Lagos state. This stunning revelation has sent shockwaves across the nation, with many wondering how Kaduna state managed to turn the corner and emerge as a beacon of hope in the region.

The “Ease of Doing Business” report has ranked Kaduna state a respectable second, with an impressive score of 65.1%, trailing only Lagos state, which boasts an enviable 85.6%. The other contenders, Oyo State, Federal Capital Territory (FCT), and Ogun State, have been relegated to third, fourth, and fifth positions, with scores of 62.7%, 61.0%, and 59.9%, respectively. This remarkable turnaround is a testament to the state’s resilience and determination to rise above the challenges that have held it back for so long.

This remarkable turnaround is a blessing in disguise, considering the dark days of insecurity that once shrouded Kaduna state like a pall. The state was previously ravaged by armed banditry and kidnappings, which had sent investors packing and crippled economic activity. However, thanks to the recent community-based peace deal, the frontline local government areas have been able to breathe a sigh of relief, and the state’s economic prospects are looking brighter than ever.

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Kaduna state’s journey to this point has not been without its challenges. The state has been mired in political logjam and accusations, with the former administration casting a long shadow over the current government’s efforts. However, the “Ease of Doing Business” report is a vindication of Governor Uba Sani’s tireless efforts to woo foreign investors and create a conducive business environment. The governor’s recent trip to Kuwait, which resulted in a grant of $63 million for out-of-school children, teacher training, and rehabilitation of classrooms, is a case in point.

While some critics have dismissed the governor’s foreign trips as globe-trotting, the positive results are beginning to trickle in, and they are a testament to the governor’s unwavering commitment to improving the lives of Kaduna state residents. The improved security, coupled with the government’s focus on industrialization, economic development, and infrastructure, is expected to have a multiplier effect on the state’s economy, creating jobs, stimulating growth, and enhancing the overall quality of life for citizens.

As Kaduna state continues to navigate the complex web of challenges and opportunities, it is imperative that the government remains focused on consolidating the gains made so far. The state must continue to implore all its arsenal to maintain the fragile peace, ensure free movement, and create an enabling environment for businesses to thrive. If the current trajectory is anything to go by, Kaduna state is poised to become the next big thing in Nigeria’s economic landscape, a shining example of what can be achieved with vision, determination, and a commitment to progress.

 

(Zubair Abdurrauf Idris is a public affairs analyst, wrote from Birnin-Gwari)

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Opinion

Re:Replace Ribadu With Ex- military Officer As NSA,Senator Urges Tinubu

Published

18 hours ago

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December 5, 2025

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Henry Bassey

As a concerned citizen of Nigeria and someone who desire a stable structure in tune with the modern dynamics which will invariably bring about security of lives and property, my attention was drawn to a statement credited to Senator representing Osun East, Distinguished Senator Francis Fadahunsi issued through his Special Adviser on Media, Sam Segun – Progress on Tuesday 2 December 2025 at Osogbo and published in Punch online and other social media platforms including Facebook, Instagram and X (formally Twitter) to mention a few.

In the statement, the lawmaker was urging President Tinubu “to further reorganize the nation’s security management team by appointing a retired military officer as the National Security Adviser. He also advised the President to “redeploy the current NSA Malam Nuhu Ribadu to another area of national service where his competence would be better utilised.”

The call by Senator Fadahunsi for President Bola Ahmed Tinubu to replace Mallam Nuhu Ribadu with a retired military officer as National Security Adviser reflects a narrow view of national security leadership, a dangerous direction of thought inconsistent with global best practices and Nigeria’s security needs, and a comment that should not go unanswered. Rather than distracting the nation with unnecessary politicization of security appointments, leaders should support efforts already succeeding to strengthen intelligence gathering, improve operational synergy, and pursue lasting peace across the country. What Nigeria needs is results, not recycled arguments rooted in outdated assumptions.

For a proper understanding, it should be noted that the broad dimensions of national security include physical, political, economic, social, food, energy and environmental aspects, which have expanded beyond traditional military concerns to encompass the gamut of modern threats. These dimensions are interconnected and involve protecting a nation’s citizens, infrastructure, and institutions from internal and external threats, such as cyberattacks, economic shocks, pandemics, and climate change, external aggression, etc. Military means is therefore one among many contributing factors to national security, not its essence. This understanding is fundamental to having the right national security strategy and architecture.

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Senator Fadahunsi’s suggestion that the President should replace the NSA with a retired military officer exposes a shallow and outdated understanding of modern national security leadership. The policymakers and security specialists of the United States and other climes, whose style of democracy we practice, have always leveraged this for preserving their national security. Among the many who have held that office in the US in recent times is a civilian lawyer, Jake Sullivan, and his predecessor too was a political scientist-turned-lawyer. Regardless of the difference in context, the fact is that the role has successively been held across the globe by civilians with intellectual understanding of the complex realities that undermine national security. Even here on the African continent, in countries like Egypt, the appointment of non-military security insiders and analysts is a proven practice. Few Nigerians are aware that policemen had been in control of ONSA in the past, serving under both military regimes and civilian administrations. Both Gambo Jimeta, a former Inspector-General of Police, and Aliyu Isma’ila Gwarzo, a retired Assistant Inspector-General of Police (AIG) have served as NSA, and their performance was outstanding because of their recognition of the diverse range of challenges that undermined national security, and their understanding of the relationship between the civilian and military spheres.

What lies at the core of Nigeria’s complex and multifactorial security challenge? Nigerians are bedeviled by internal security collapses that require much more than tanks and other military hardware to combat, without diminishing the need for that. The nation desperately needs ideas and brains to identify the root causes of the conflicts and proffer solutions, hence the need for an NSA who possesses a combination of expertise in statecraft and public policy, mastery of engagement with civilian and military structures, dedication to the nation, as well as experience in internal security and law enforcement, to change the negative security narrative of the country – something that Mallam Ribadu has brought to the table.

Ribadu’s leadership is anchored in deep experience in intelligence, anti-corruption enforcement, inter-agency collaboration and counter-terrorism policy. The NSA is not a combatant position, the unique value they provide is the ability to analyze available information and intelligence to predict the state of security in the nation, hence the critical need for one with an understanding of the socio-cultural and political determinants of conflicts in a country like Nigeria undermined by internal security largely. Today’s security environment demands intelligence, intellectual capacity, integrity and strategic coordination of civilian and military structures, with unwavering patriotism, qualities which Mallam Nuhu Ribadu has demonstrated for decades. He is a square peg in a square hole as the NSA. The idea that only a soldier can manage national security is obsolete.

The notion that only government officials with military backgrounds could command the necessary respect within the armed forces is a dangerous idea to be promoted by anyone in a democracy, and is far from what modern military training delivers to the officers and men of the various services. The proper democratic structure which the military stands ready to uphold and defend, including proper regard for the command of any official appointed by the President and Commander-In-Chief, needs to be reinforced, not weakened as this suggestion by Senator Fadahunsi inadvertently achieves. The role of the NSA will remain suboptimized unless the nation moves away from excessive militarization of the office, particularly for a country where the military is overburdened with taking on responsibilities under the Nigeria Police Force and other internal security agencies.

National security is not all hinged upon and cannot be left to military power and coercion alone, it must enlist the other strengths of our nation to holistically address our challenges, and persuasively engage the world. As a nation we must strengthen the civilian security capabilities we have left to waste for so long. President Bola Ahmed is on track with the appointment of Mallam Nuhu Ribadu and the results that have been delivered so far, this needs only to be sustained for more results in the interest of all Nigerians, and not disrupted by a myopic few.

Henry Bassey,
Former Lagos State Chairman, Police Campaign Against Cultism and Other Vices.
Currently Head Community Engagement, Police Campaign Against Cultism and Other Vices, South West
Email: bassey.henry373@gmail.com

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Opinion

DSP Barau Jibril: A True Model of Progressive Politics

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1 day ago

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December 5, 2025

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By Dr Usman Sarki Madobi

In an era when public trust in political leadership often fluctuates, the example set by Deputy Senate President Barau Jibril stands out as a refreshing demonstration of what progressive politics entails. His approach to governance and representation reflects a blend of humility, inclusiveness, and unwavering dedication to the public good showcasing the qualities that have earned him admiration across party lines and among citizens who yearn for purposeful representation. Today, DSP Barau Jibril became a treasure in the political arena of Kano state and the country at large. His politics, representation and leadership style has made him a distinguished politian worth of supporting for every elective position both at state and national levels.

At the heart of Senator Barau Jibril’s political philosophy is selfless service. His actions consistently demonstrate a commitment to the welfare of his constituents and the nation above personal or political gain. This people-first mindset is a cornerstone of progressive leadership, where decisions are guided by the desire to improve lives, uplift communities, and strengthen democratic institutions. His reputation for placing public interest before personal ambition has made him a dependable figure in the political landscape of Kano and Nigeria as a whole.

Another hallmark of his leadership is his refusal to discriminate between party members and the opposition. In an environment where political divides sometimes hinder national development, Senator Barau Jibril proves that collaboration is possible and paramount. His inclusive style ensures that all voices, regardless of political alignment are respected and considered in the pursuit of common goals. This rare quality fosters unity, reduces partisanship, and encourages a healthier democratic process that facilitate human and Societal development.

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DSP Barau Jibril also exemplifies a dignified brand of politics that rejects violence, intimidation, and thuggery. He further promotes peaceful engagement and issue-based politics that helps in strengthening Nigeria’s democratic culture. His stance sends a clear message stressing that political success should be achieved through ideas, integrity, and service to the people not coercion or unrest. This commitment to civility contributes to a safer and more respectful political environment.

As a member of the Senate, his dedication to purposeful representation is evident in the seriousness with which he approaches legislative responsibilities. His purposeful representation made him to understand the needs of his constituents and work relentlessly to address them through meaningful legislative action. He also champion the formulation of policies that support national growth, equity, and stability. DSP Barau Jibril’s commitment in this regard underscores his credibility and effectiveness as a true representative that can transform Kano within a limited time if given the chance.

Perhaps one of the most profound aspects of his political character is his consistent respect for his party leadership, fellow members, and for humanity as a whole. True progressiveness is grounded in humility and empathy, and Senator Barau Jibril embodies these values through his conduct. His respect for others fosters cooperation, reduces conflict, and reinforces moral leadership qualities essential for building strong political institutions.

In conclusion, DSP Barau Jibril stands today as a true model of progressive politics, not only because of the offices he holds but because of the values he upholds. His selfless service, inclusive leadership, insistence on peaceful politics, commitment to meaningful representation, and deep respect for people form a powerful blueprint for the kind of leadership Nigeria needs. In him, many see a compelling example of how politics can indeed be a noble instrument for societal transformation.

Dr. Usman Sarki Madobi

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