Nigerian or Dangote economy?

In the course of the week, the Central Bank of Nigeria (CBN) announced that in achieving the “backward integration policy” only three companies would have exclusive access to Forex for importation of sugar . The are Dangote Sugar Refinery Plc, BUA Sugar Refinery Limited, and Golden Sugar Company – owned by Flour Mills of Nigeria Plc.

In announcing this CBN director of trade and exchange department, Ozoemena Nnaji clarified that the backward integration policy in the sugar industry involved increased production in the supply chain and the expansion towards other materials needed for core products. He further explained that the Federal Government of Nigeria under the National Sugar Development Council established the Nigerian Sugar Master Plan to encourage and incentivise sugar refining companies in their Backward Integration Programme (BIP) for local sugar production.

While this ,in theory,is meant to incentivize local producers , in actuality, the means to achieve adequate production for local usage is not there. In 2019, Nigeria ranked 50 out of 103 sugar producing countries with local production capacity of 700,000tonnes (raw value). The Boko Haram and migrant herdsmen insurgencies in the Northeast sugar consuming region have dislodged the population with majority settled in camps as internally displaced persons.

In 2018, Godwin Emefiele added fertilizer among the list of 42 items it can no longer allocate forex for its importation into Nigeria. Even when no arrangements were made to boost or provide subventions for local companies to produce adequately for farmers. But the Forex ‘ban’ began to make sense to observers when Dangote Fertilizers facility at Ibeju Lekki commenced commercial production of Urea in June this year.

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In 2019 ,in a grand claim of protecting local industries,conserving scare foreign exchange and creating jobs , the CBN placed Forex restrictions on milk and dairy products. That announcement came few days after Aliko Dangote reportedly disclosed his plans to invest $800 million in dairy production and other agricultural produces.

Let us not lose sight of the fact that Wheat has effectively been included in the ‘no-forex’ list.

The Federal Government, by this the CBN ,is effectively destroying businesses and handing over the coffins to Dangote to supervise the burial ,and subsequent increase in poverty of Nigerians.

Dangote’s business entities have single handedly enjoyed government backed monpoly of every fast moving economic product. Is that not a suicide mission business-wise? He is guaranteed exclusive access to Forex, tax exemptions , waivers and subsidies. Any business he enters ,he suffocates other entrepreneurs out of the terrain, to the detriment of the Nigerian populace whose purchasing power keeps decreasing with high inflation , unemployment and high-handed government policies.

Earlier in February 2021, the Chief Strategy Officer of Dangote Group, Aliyu Suleiman in a tour of the Dangote Refinery under construction told the National Assembly’s Joint committee on the Petroleum Industry Bill (PIB) who paid a visit to the site that “… importation rights for petrol should be awarded only to licensed and active refineries in Nigeria.” Would it be a thing of surprise when petrol and petroleum products would be added to the list of no Forex?

In the cement industry ,Dangote enjoys outright monopoly that he even challenged why BUA Cement would be given same consideration as him. Cement sells for ludicrously high prices , compounding the problems of housing deficits in the nation as it’s only one who can afford the excessive prices that can build.

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What Nigeria gains from giving Dangote Group monopoly in many key sectors of the country far outweighs the adverse effects on the economy. Granted ,this company provide jobs but how much compared to when other entrepreneurs are given a level playing field to also provide more jobs to curb unemployment and poverty.

While Forbes and other magazines yearly regale us on how Dangote is the richest man in Africa, what they fail to tell is that he faces no competition, he enjoys monopoly, policies are tweaked to please him and he sells his commodities at prices he want. It is safe to say that the Nigerian Economy is the Dangote economy.

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