Opinion

From Cementing Poverty To Oiling Its Wheels ?

Published

1 year 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

Kano APC Youth Coalition, Nasir Ja’o’ji and Party Survival

Published

1 day ago

November 21, 2024

Nigerian Tracker

By Abba Anwar

At cursory look of the title of this piece, what readily comes to mind, is the existing relationship between Kano APC Youth Coalition and Nasir Bala Ja’o’ji, in APC realignment process or procedure. This really captures the picture clearly from the surface. But there is more to it.

Kano APC Youth Coalition came into being more as a one-man-show, probably self-styled and crafty moved. But subsequent engagements of the Coalition, proves otherwise. Some people thought, the Coalition came handy canvassing for primary support for some quasi – politicians, unproductive as they appear, who always hide behind the scene and make a cover under good image of the party leadership at all levels.

Many people, including me, thought this Coalition under Adamu Unguwar Gini, would operate in desperation, under the guise of recuperating party youth into one basket for misleading purpose. As some elders, would-be-elders and self – acclaimed elders operate from clandestine position.

For sure the Coalition, prepared before its debut. Party elders, leaders and other stakeholders were contacted for direction and guide. This, I was not told, but I observed. I understand this by looking at its growing process. I equally understood that, the leadership of the Coalition was one time tilted towards particular side of the prism. But experience and good intention, in my view, necessitated for spreading the leadership into all sections of the state.

It is this strategy, among others, that gave individuals like Hon Nasir Bala Ja’o’ji, to see reason in aiding the movement. Though he is the Zonal Leader of the movement, from Kano Central. But his contribution towards having effective and efficient implementation of the core central objectives of the group, that is making the party stronger and domineering at all levels, gives him the courage to be one of the principal stakeholders.

The recently announced donation of Eighty Eight Million Naira (N88m) to the Coalition for the 44 local governments tour and empowerment of 100 people from each local government, says a lot in his enduring commitment to the expansion and making the party strong enough to compete comfortably come 2027, at both state and national elections.

The proposed local governments tour and empowerment programme scheduled for time to come, is an important pointer to the fact that, this Coalition has very strong and fearless individuals that are ready to sacrifice their time, energy and resources towards political alignment and realignment within the party structure.

People like Musaddique Wada Waziri, Malam Abdussalam Ishaq (Kumbotso), Umar Maiwayo Rimingado, my younger brother Inyass Habibu, Ibrahim Danyaro, Jijitar, Abubakar Indabawa, former Vice Chairman, Warawa, Dini Manchester Kankarofi, Abubakar Aminu, Hon Barwa, Sani Gilashi, Danfillo, Idris Zango, among many others, are playing very critical role in strengthening the grip of the party across the state and the nation at large.

One interesting thing about this combination is, here are important actors, who, for strategic reason, come from all “sides” of the party stalwarts. Party stalwarts because they are the shining stars of the party in the state.

Stars like Deputy Senate President, Barau Jibrin, former Deputy Governor and Gubernatorial Candidate for 2023 election, HE Nasiru Yusuf Gawuna, former Commissioner for Local Governments and Chieftaincy Affairs and Deputy Gubernatorial Candidate for 2023 election, HE Murtala Sule Garo, Hon Abubakar Kabir Bichi, among others.

But all the Stars above lineup behind our Flagship, the National Chairman of the Party, Dr Abdullahi Umar Ganduje, CON.

After critical review of the intention of the Coalition, Nasir Ja’o’ji comes to believe that, this Coalition means well for the party. And should therefore be facelifted, encouraged, guided and supported. After believing that, the Unguwar Gini led group, “… belongs to everybody and does not belong to anybody…”, Ja’o’ji made it compulsory to always give a helping hand to the group. More importantly, since the Coalition means genuine support for the party at all levels.

Let me still insist that, if Ja’o’ji a political appointee under President Tinubu, as a member Governing Council, of the Federal College of Education (Technical), Potiskum, Yobe State, can do this, contributing N88m, I’m sure other political appointees under the same administration can also replicate.

Because supporting Coalition in the same pace and manner, equals to supporting the party, the National Chairman, and President Bola Ahmed Tinubu at the same time. In my view therefore, Ja’o’ji apart from being a pacesetter among all political appointees from Kano, he is genuinely a firm believer of APC programmes and policies.

My appeal is for the National Chairman of the party, Baba Ganduje, and the Tinubu led administration, to kindly see reason for continued support for the Coalition and similar ones across all the 36 states of the federation, including the Federal Capital Territory, Abuja.

As Unguwar Gini model shows in Kano, Coalition of this nature is not taking away any responsibility of party leadership. We can see how harmonious is the relationship between APC Youth Coalition and state leadership of the party, under Prince Abdullahi Abbas. Another pillar of great substance.

Neutrality of this Coalition, in my own understanding, is clearly manifested in how our shining stars give helping hands to the movement. They are eager to give resources and moral support. It is indeed the neutral posture that gives Ja’o’ji the strength to be of that magnitude.

Anwar, was Chief Press Secretary to the former Governor of Kano State, Dr Abdullahi Umar Ganduje and can be reached at fatimanbaba1@gmail.com

Opinion

Open Letter to the Former Minister of State, Housing and Urban Development

Published

4 days ago

November 18, 2024

Nigerian Tracker

Abba Dukawa

As Muslims, we believe in Al-Qadar, the concept of Divine Decree or predestination. This pillar of faith reminds us that everything, good or bad, comes from Allah. We trust in Allah’s wisdom, love, and plan, acknowledging that our lifespan, deeds, and circumstances are recorded in the Lauhul-Mahfuz.

In light of your recent dismissal, I’m concerned that your public statements blaming certain individuals for your removal contradict this fundamental Islamic principle.

You admitted President Bola Tinubu explained your removal was due to the need to balance Kano State’s political representation. Quoting you: “I was surprised, as I wasn’t found guilty of wrongdoing or poor performance… Kano North was overloaded with political officers, hence the need to strike a balance.”

I urge you to reflect on Quran 2:286, “Allah does not burden any human being with more than he is well able to bear,” and Surah Ali ‘Imran, verse 26, “Allah! Possessor of the kingdom, gives the kingdom to whom He will, and takes the kingdom from whom He will.”

Your rise from local government chairman to deputy governor and minister was Allah’s will. Similarly, your dismissal is part of Allah’s plan.

I caution against desperation and blaming others. Instead, trust Allah’s wisdom and providence.

As a Muslim, it’s inconsistent to think anyone can alter Allah’s plan for you. I believe those close to you are misleading you by allowing you to publicly blame others for your dismissal as Minister of State, Housing and Urban Development. It’s unwise to grant interviews after being relieved of duty, as it comes across as desperate—and your media handlers are equally at fault for permitting it.

Why have the rest of the ministers who were equally sacked remained silent? Why are you the only one expressing dismay for being relieved?

Dukawa writes from Abuja and can be reached at abbahydukawa@gmail.com

Opinion

Sokoto:Sen. Wamakko’s 9 Years Of “Poor” Representation In The Senate

Published

5 days ago

November 17, 2024

Nigerian Tracker

Sokoto is known for leadership and where religious knowledge is deep-rooted. So, leaders from the Caliphate are well respected and honour by people from other parts of the country. The reason is clear, Sokoto is the seat of Caliphate that produced great leaders and Islamic scholars of high repute.

So, nobody expects less when it comes to leadership in the state, but if you are a keen observer and follower of activities in Nigeria, you would wonder if the Sokoto they are talking about today, have any link with the activities of the great leaders and scholars that were in charge of Sokoto of years back. Certainly, not, because the kind of leadership is not the same, today its political leadership and followers of Nigerian politics know that, the present day politics can’t provide the kind of leadership the Sokoto of the past provided.

Analysts questioned the negative trend ascribed to Sokoto state. They asked several questions including but not limited to how can the great Sokoto state be rated among the educationally backward states in Nigeria? Why should Sokoto be rated among the poorest state in Nigeria? They are worried that it is not acceptable to count Sokoto state among states with negative statistics on child and maternal health; malnutrition should not be an issue in Sokoto. In fact Sokoto should not be among the state that should be faced with insecurity challenges.

But all these and more are prevalent challenges in Sokoto state and this call to question the kind of leadership the political class in the state are providing. For those who are concern about the happenings in the state, are begining to doubt all the positive publicities some top politicians in the state are enjoying for years.

One politician in the state that fortune has smiled on since the inception of this political dispensation in 1999 is Senator Aliyu Magatakarda Wamakko, he has been around for so many years, from the grassroots to the mainstream politics of the state Wamakko has been at the forefront of leadership in the state. He was deputy governor for 7 years, governor for eight years and now Senator for nine years.

Wamakko enjoyed positive publications as a governor and had some landmark achievements ascribed to his name. He was seen as one of the performing governor in the state. Even though critics and analysts have contrary opinions. They said in terms of impact and cost analysis of some of his projects and or their lifespan/durability, Wamakko’s tenure is more of a disservice to the people of Sokoto than a blessing.

To buttress their argument, the critics and analysts, drew the attention of people of Sokoto to compare what his predecessor Sen. Ibrahim Lamido has done in terms of quality, durability and relevance to the general wellbeing of Sokoto people and the plethora of substandard projects Wamakko littered Sokoto with.

They further argued that to assess the quality and sincerity of Wamakko as a leader, his nine years as a senator should be critically scrutinized and the result of the findings be made public for all to judge. According to the analysts, Wamakko has not represented his people well. As a Senator, they said, he has held privileged committees that should be beneficial to the entire Sokoto, but no soul aside members of his inner circle that has benefitted from his senatorship seat.

They explained that the years of neglect of local governments like Gudu, Tangaza, Binji, Silame is the obvious reason why the Lakurawa terrorists group existed in the area for over 8 years unnoticed by the Nigeria government.

Sokoto North senatorial district comprises of Sokoto North and Sokoto South, Wamakko, Kware, Binji, Silame, Gudu and Tangaza, you go round these local government areas and point to one particular thing the senator has done for members of the senatorial district.

Yes the eastern senatorial district of Sokoto is facing serious security threat in the last seven years, and this has affected socioeconomic activities, which has increased the level of poverty in the region. However, for the last 17 months, things have began to change for better. Purposeful leadership and deliberate actions to change the fact of things can be witnessed.

The purposeful leadership of senator Ibrahim Lamido and deliberate attempt to find a lasting solution to the many challenges affecting the region are so glaring for all to see. For instance, the deliberate investment in education of youth from the region is one sure way of liberating the region from the grip of unscrupulous elements taking advantage of poor level of education in the area to recruit terrorists.

In an unprecedented move and boldness to confront the deep rooted challenges of poor quality of education, Sen. Lamido has sponsored about 50 youth from the zone to study in various fields of human endeavours in India. This is in addition to many interventions in the education sub-sector from the senator, who out concern to the education of youth, declared war against poor education in the region.

This is not happening in any of the senator districts of Sokoto including Sokoto central where Sen. Wamakko spent 9 years representing his constituents in the Red Chamber. It has never happened, it is not happening and I am not sure if there is any plan to do anything like this by the two other senators for the teeming youth in their respective zones. All the eight local government areas of the senatorial district need education intervention including the two metropolitan, but nothing close to this has ever happened. Why won’t Sokoto be rated as educationally backward state when leaders don’t see the need to invest in education of the teeming youth?

Due to the security challenges, Sokoto state is faced with a lot of humanitarian challenges as a result of banditry attacks. And Sen. Lamido has responded well to these challenges. He did not stopped at distribution of relief materials and visitation of victims of banditry attacks, rather engaged in a very robust package of intervention where over a hundred of widows were empowered with N250,000 each to engage in micro and small businesses so as to become self-reliant.

This is done, to facilitate the resuscitation of the economic activities of eastern senatorial district that has suffered from bandits attacks and Sen. Lamido is doing all these from the point of knowledge, that no nation can survive insurrection if it’s people are economically incapacitated.

In the entire nine years of Sen. Wamakko, nobody can provide the record that he has done this kind of gesture. Nobody is talking about giving rice and clothing materials to widows and orphans. Nobody is talking of photoshoot with people who genuinely need humanitarian assistance, but leaders are taking pictures to further exploit people in need of assistance.

Sen. Lamido’s contributions in fighting insecurity in the eastern part of Sokoto if replicated by other senators in the state, nobody would be talking about the Lakurawa terrorists group in Sokoto. Sen. Lamido had from time to time assist communities’ efforts towards ending insecurity. In fact, with permission by the federal security agencies, Sen. Lamido funded the civilian JTF to support the mainstream security personnel in fighting the terrorists operating in the zone. This is in addition to many efforts that can’t be express in black and white due to their sensitive nature all in a bid to restore peace and normalcy in his region.

Such exemplary leadership is lacking in other parts of the state including in Sokoto North, Sokoto South, Gudu Tangaza Binji, Wamakko, Silame and Kware where Senator Wamakko is representing.

Needless to engage in lengthy write up, if Sen. Wamakko in his 9 years did 10% of what Sen. Lamido has done in 17 months in fight insecurity, the Lakurawa terrorists group wouldn’t have penetrated into Nigeria.

The security challenges in the eastern part of Sokoto is receiving the adequate attention of Sen. Lamido. Beside his contributions in fighting banditry, the senator he has equally provided many communities with good drinking water, relief materials and other supports to the Internally Displaced Persons (IDPs) with a view to making their better.

Signed:
Concern Sokoto State Progressive Mind.
Convener