Should Benin Republic Import Cement From China Or Buy Dangote Cement From Nigeria ? Jekwu Ozoemene Explains
The Oasis Reporters
November 4, 2019
When Mr. Ethelbert Mbama noted that Benin Republic imports cement from China while Dangote Cement is just 28km from them, some crucial questions heretofore arises about comparative analysis review, production scale issues, costs and processes in the entire gamut of production cycle as it impacts on the consumer.
Nigerian born former Access Bank of Zambia Managing director, Dr. Jekwu Ozoemene gives an insight and writes:
“This goes to the heart of Tosin Adeoti’s lucid treatise on Nigeria’s rice problem and our comparative advantage (or lack of it) in rice production.
A World Bank 2016 report that examined the costs and impact of lack of competition in a number of industries in Africa found that African cement prices averaged US$9.57 per 50kg bag compared with US$3.25 globally.
That is exactly why a Benin Republic will import cement from China rather than buy from Dangote cement that is 28 km away. Simply because it makes economic sense.
Does it even make sense for Benin Republic to pay 183% more for the same product just because they want to be nice neighbours?
Back to the Comparative advantage narrative as it concerns local manufacturing. I think we really need to determine those products that we truly have a comparative advantage in and focus on them.
Of what use is it if our locally manufactured products are so expensive compared to the imported ones that it amounts to literally stealing money from an already impoverished people?
Producing locally is very good, however if the end product is 183% more than the landing cost of the same product when imported, then other than the romanticized satisfaction of manufacturing locally, government has to urgently find a way to increase it’s citizens purchasing power”.
Beyond increasing the purchasing power of the citizenry according to Dr Ozoemene, what could be at the root of expensive production processes of Dangote cement at about 183% above the global average ?
It could be that Dangote’s place of production lacks basic infrastructure. That is a government issue.
Secondly, it may be that high taxation are unfriendly to industry. Or perhaps production innovation education is grossly below standard.
These are issues that ought to be looked into if the Country’s industrial growth would matter to the people leading the country.
Resource Persons:
Dr. Jekwu Ozoemene
Ethelbert Mbama
