The Dangote conundrum

5 minutes read

By Dare Babarinsa

From all indications, President Bola Ahmed Tinubu’s participation in the G20 summit was a resounding success. He went there to declare that Nigeria is back as a force to be reckoned with in the international community. “Nigeria is poised, able and willing to be a major player in this family of the G20 and in shaping a new world, without whom, the family will remain incomplete,” he said.

To reinforce his assertion, another Nigerian heavyweight on the international scene, the Director-General of the World Trade Organisation, Professor Ngozi Okonjo-Iweala, was also on hand to lend credibility to the president’s declaration.

With the President in Delhi were, the Minister of Foreign Affairs, Ambassador Yusuf Tugga; the Minister of Finance and Co-ordinating Minister of the Economy, Wale Edun; the Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani and the Minister of Industry, Trade and Investment, Dr Doris Uzoka-Anite.

More significant, however, was the participation of leading lights of the Nigerian private sector, led by the founder and President of the Dangote Group of Companies, Aliko Dangote. Other businessmen with the President include, Chairman of Heirs Holdings, Tony Elumelu; Chairman of Femi Otedola Foundation, Femi Otedola; Chairman of the GIG Group, Chidi Ajaere and Chairman of Airpeace, Allen Onyema.

It is becoming clearer now that the President wants to devolve more responsibilities to the Nigerian private sector, which he believes should drive the economy. That has not always been so. During the First Republic, the Nigerian political elite embraced the idea that government should control “the commanding heights of the economy.”

Therefore, most of the banks, all the leading industries, electricity corporation, telecommunications, airline, shipping and many other sectors were directly under the control of the Federal and regional governments. One man who tried to be different was Chief Obafemi Awolowo, who helped his friends to set up the Western Nigerian Development Corporation (WNDC).

Chief Awolowo and his advisers had come up with the idea that instead of having surplus money sitting idle in the banks, the Western Nigerian Marketing Board should give loans to well-known and credible people who would establish businesses to challenge many of the leading British and European business houses.

Thus, loans were given to leading members of the ruling Action Group (AG) to establish the WNDC. The company invested massively in real estates and industries, dominating the Ikeja Industrial Estate (which was then part of the Western Region) and building new structures that changed the landscape of Lagos, including the Western House and the Ikeja Airport Hotel.

Awolowo’s successor as Premier, Chief Ladoke Akintola, did not share his dreams about the private sector and the WNDC was forcibly taken over and nationalised, though it never defaulted in the repayment of its loans.

The company, today, is known as the Odu’a Investment Company Ltd. There are few serious businesses that have been added to the portfolio of the Odu’a Group since the WNDC days.

When Sir Remi Omotoso, the late Group Managing Director of Odu’a Group, tried to set up a communication company to rival the nascent MTN and Globacom, it was not a successful venture despite his best efforts. The truth is that the Odu’a Group is yet to have another golden era since the WNDC days.

Despite the tenuous adventure of the Odu’a Group, the political elite of Nigeria continued to cling to the old ideology of state controlling “the commanding height of the economy” until General Olusegun Obasanjo’s second coming in 1999 as an elected President.

Obasanjo, drawing from his experience as a military Head of State, decided to go in the opposite direction. He sold off many unviable Federal Government companies and ended the monopoly of government in the telecommunication sector. It was the Obasanjo era that gave Nigeria the Dangote Brigade that accompanied the President to Delhi. Without doubt, Dangote is a Nigerian success story.

Few weeks ago, I was in Ado-Ekiti, where many of the people were blaming Dangote for the high cost of cement. They were also parroting the rumour that Dangote is selling cement in Benin Republic for N1,600 while selling it to Nigerians at N5,500 per bag. Dangote has no cement factory in Benin Republic. This rumour is a measure of Dangote’s tremendous success as an industrialist and business leader. He has become a living legend and incredible things are attributed to him.

Thirty years ago, when he was a hardly known businessman struggling to build his enterprise, the leader of the cement industry was another company.

Dangote represents Nigeria’s economic power on the continent. His cement company is now present in 10 African countries, including Nigeria.

He has cement factories in Tanzania, South Africa, Ethiopia, Zambia, Congo and Senegal. He has grinding plants in Ghana and Cameroun. He maintains an import terminal in Sierra Leone. The Obajana Dangote Cement complex is one of the largest single industry sites in the world. The Dangote petrochemical complex in Lagos is the largest in Africa. About 12 companies collected licences to build oil refineries. Dangote was the first to take the plunge.

The Dangote phenomenon is a study about the possibilities of our great country. A man has risen from this soil and has grown to become a giant oak on the universal stage, with footprints on every continent.

On the board of the Dangote Group are Nigerians, Asians, Americans and Europeans. Yet this man has no residence outside Nigeria, remains humble and accessible and continues to put almost all his eggs in the Nigerian basket.

Yet, politicians who take advantage of their temporary tenure in office, put their eggs away in Dubai, South African, Hong Kong, Singapore, the United States, the United Kingdom and the old Swiss banks.

President Tinubu needs to take cognisance of the Dangote conundrum. There is need for Nigeria to create the enabling environment to grow new businesses and let us have 100 more Dangotes in the next eight years.

Few days ago, the Bank of Industry released a report that it achieved an historic increase in total asset growth of 67 per cent bringing the bank’s total value to N3.3 trillion. Its profit before tax was also up by 177 per cent to N104 billion.

This impressive performance in 2022 is also an indication that our Nigeria is still fertile for business. It is, therefore, necessary that President Tinubu, while he is looking for foreign investors, should also encourage the growth of Nigerian investors.

The challenge is directly in the court of Wale Edun, the coordinating Minister of the Economy. During the Nigerian Civil War, the Minister of Finance, Chief Awolowo, was also the Vice-Chairman of the Federal Executive Council. He managed the war economy so well that Nigeria did not have to borrow a kobo to prosecute the war.

Among other measures, he did three things: he balanced the budget, he maintained a steady foreign exchange regime and he did not borrow money. The greatest teacher told his inquiring disciple: “Go and do likewise!’’