Dangote’s Cementing Monopoly
Whenever the name Dangote is mentioned, we all have a similar imagery of happiness, power, affluence and splendour. Right?
Believe me, this is not another article about Dangote’s heroics. I have seen through the length of a fly’s eye.
Aliko Dangote is the wealthiest black man in the world. He has been named the wealthiest man in Africa for the 9th time in a row, with wealth estimation of $8.4 billion. It is safe to say his constant delivery on Forb’s List is as good as an overworked midwife.
Dangote is considered the richest man in Africa by both Bloomberg and Forbes. He founded, co-owns, and controls Dangote Group, one of Africa’s largest conglomerates. Dangote Cement; the flagship company of the group has operations and subsidiaries in about eight African countries and is the largest, by market capitalisation, of over 160 companies currently listed on the Nigerian stock exchange.
But it wasn’t always like this. Dangote used to be like any other billionaire in Nigeria. And there is a capital reason WHY. But in order to understand Dangote’s recent wealth, you must understand his in influence on the Nigerian government.
Aliko Dangote was just another wealthy man from Dantata’s household prior to the build up of the 2003 Nigerian presidential election. The then president, Olusegun Obasanjo aligned with Dangote to sponsor his re-election campaign, after a fall out with his vice, Atiku Abubakar. Atiku being People’s Democratic Party’s money maker, was supposed to fund Obasanjo’s re-election but had a personal project to succeed Obasanjo as president after one term.
Dangote’s presence has been felt ever since. He basically bought the election for Yar’Adua from the Nigerian masses, literally. 5 billion naira, a rented jet, 45 jeeps. This is the reality of Nigerian democracy. And this is the role of the “quiet” Dangote in picking and installing leaders who will in turn reward him by handing over the nations coffers to him on a platter of gold.
Dangote is counted among President Obasanjo’s inner circle of business advisors. It is no coincidence that many products on Nigeria’s import ban lists are items in which Dangote has major interests.
What do you think happened to St Louis sugar?
Things didn’t change even when power switched to APC…
People don’t really see Dangote’s relationship with the government and it’s impact on policy decisions. While Dangote is involved in many industries, over 90% of his net worth /wealth comes from his cement business. Dangote Cement’s 65% share of the Nigerian market means that it sets the prices for the commodity in the country.
Dangote regularly feeds Nigerians with tales of how he has put all his eggs in Nigeria’s basket and how he is always betting on the country by investing more than any other foreign investor. Every now and then, he announces large investments in an industry, sometimes running in to billions of dollars. These stories may or may not come true but helps the narrative of how Dangote is investing in Nigeria even when no one else is doing so.
In June 2016, the World Bank published a report examining the impact and cost of lack of competition in a number of industries in Africa. They found out that African cement prices averaged $9.57 per 50kg bag compared with $3.85 globally. To translate that in English, it means that Africans paid 183% more than people around the world for the same product.
The report also shows how the Nigerian government had been phasing out import licenses for cement beginning from 2012, the same time when Dangote increased the amount of cement production in Nigeria as well as the Central Bank of Nigeria banning the use of foreign exchange in cement import.
But if Dangote’s relationship with the government allows it to make a healthy profit at the expense of Nigerians, maybe it can be mitigated by the taxes it pays to the government
Between 2010 and 2015 when Dangote Cement earned around 1trillion naira ($6billion) in profit, it paid only 12 billion naira ($72 million) in taxes. A rate of just 1%.
The Nigerian government is the chief enabler of Dangote Cement and ensures it can extract fat profits from the Nigerian market by subsidizing it’s operation with tax breaks and preferential foreign exchange allocation.
But the the question really is; has Nigeria benefited from Dangote Cement? There’s not affirmation to that.
The most damning Case of them all.
Dangote does not see any problem with terrorism, insecurity or the level of poverty in the country. To him, Nigeria’s biggest problem is infrastructure. Why won’t he think that? He is the sole supplier and and manufacturer in Nigeria. He is at the receiving end of contracts to build while Nigerians die of terrorism and poverty.
Isn’t it mind boggling how a man with so much wealth contributes next to nothing to his people and poverty population of Nigeria? This person manipulates Nigeria’s political scene in all manner that ensure his immense wealth is derived from exclusive deals in Nigeria yet he lacks commitment in the development of his own people. Kano State, from where his family originates has over 1 million Almajiri beggars. But the wealthiest man in Africa won’t do anything about this situation, but rather he finds it convenient to donate (2 billion naira) to the federal government.
The Nigerian press also helps to propagate the superficial story of Dangote’s heroics. He is never really criticized or addressed as a villain he might not be better than . The sad truth is that Dangote is part of the reason why there are cyphers who rule Nigeria horribly – as he benefits from deals, cheat Nigeria and it’s people, and gives nothing back to the society he lives in.
By Ekechi Gerard