Dangote Cement In East Africa, Nigeria And The Debilitating Attitude Of Government To Entrepreneurship
The Oasis Reporters
November 4, 2019
By Nnaemeka Obiaraeri
Only the other day, I did a post highlighting the insensitivity and deliberate policy framework/pursuit of the current Federal Government of Nigeria to sustain the massive corruption and perfidy in the Nigerian Downstream oil and gas market.
I stated it clearly that the kitchen cabinet at Aso Rock deliberately refused to sell off those moribund downstream oil and gas assets (including the refineries) to deep pocketed private sector investors to take over and revamp those assets because they want to continue misappropriating our crude oil earnings in the guise of waiting for the mega Dangote Industries Refineries to come on stream in 2019.
Their thinking is that once Dangote completes his $9billion Refinery and Petro-Chemical complex, then, import of refined petroleum products will cease and Nigerians will have eldorado. They assume that by providing subsidized dollar rates to Dangote and giving him preferential dollar allocation treatment, without providing him with the requisite infrastructural support that Dangote will make the prices of refined products in Nigeria to sell at below N145 per liter.
Honestly, I have never seen the kind/collection of wicked , greedy and irresponsible “anywhere belle face” leaders as we have in Nigeria today. Such were their thought process/mindset, when they ran down most of our publicly owned cement companies and assets and then handed it over to Dangote to run for them hoping he will crash prices of the product once local supply meets demand. They forgot that the richest man in Africa is first a business man and not a charity agent.
TODAY, the average retail price of a 50kg bag of Dangote cement in Kenya is $4.70/N1,438. Dangote exports Cement from his Ethiopian and Tanzanian plants to Kenya.
In Tanzania, a 50kg bag of Dangote cement is selling for $4.50/N1,377.
In NIGERIA, the retail price of Dangote Cement is selling for N2,550-N2,600.
NOW DO YOU KNOW THE INCENTIVES THAT THE ETHIOPIAN GOVERNMENT OFFERED TO DANGOTE?
To attract Dangote to set up a plant in Ethiopia, the government offered to supply the firm with electricity at a discounted rate of $0.03 kWh. This has seen the firm reduce its production costs by over 40 per cent compared with its Nigerian operations.
WAY FORWARD.
Rather than totally liberalize the downstream oil and gas sector. Rather than put in place key infrastructure support for businesses; Put in place transparent and market driven price mechanism in our oil and gas market that will engender stiff competition amongst payers and attract new investments; Put in place global best and transparent policies and programmes that are not subject to the whims and caprices of the man in Aso Rock; these folks in power are busy playing populist games/lies and hoping that Aliko will soon become government for Nigerians. (See folks, Dangote is not bigger than EXXON MOBIL, CHEVRON, ADDAX, ENI-AGIP, TOTALFINA-ELF etc). If we open up our markets and stop playing these wicked political roulettes, these big IOCs will establish mega refineries and gas plants in Nigeria.
ALIKO DANGOTE’S REFINERY WILL NEVER SELL PRODUCTS TO YOU IN NAIRA WITHOUT DOLLAR BACK GUARANTEES FROM THE CBN. He will repay his dollar loans in dollar. He will sell his products at competitive global best prices. He will never play Santa claus to anybody. Most unfortunately, that refinery is not coming on stream until the end of 2023 .
God please have mercy on us.
Written by Nnaemeka Obiaraeri
First published in December 2017.
