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Friday, 6 September 2013

Where are the other oligarchs?

We were very pleased two days ago when the news broke that one of Nigeria’s most versatile businesses, Dangote Industries, had received a loan facility amounting to N537 billion for the development of an oil refinery, a petrochemical plant, and a fertilizer plant.
This news should come as a welcome development to anyone who has the interest of this nation at heart; if for anything, because of both the possibilities that these plants pose for our economy, and because of the track record of the group involved.
We are very pleased that Nigeria’s financial system is playing a major role in sourcing the funds for such a huge undertaking, especially given the past history between the Dangote Group and some of our banks.
We must not forget that in 2010, Dangote returned $1.27 billion to a slew of banks following the publication of his name as the owner of a non-performing loan. That singular action did more harm to the economy than good as banks are meant to create money through lending, and soaking them in liquidity would ultimately lead to a crash of the system.
Therein lies a potential banana skin in this deal. Are our banks ready for this kind of huge financing project?
However, we will be doing this bit of happy news a huge disservice if we choose to focus on the possible pitfalls when there are so many positives.
Top of the list of positives for us, and for every Nigerian, would be the fact that the factories will create about 9,500 direct and 25,000 indirect jobs. Given the current rate of unemployment in the country, which according to disputed figures from the National Bureau of Statistics, is as high as 48%, the combined figure of 34,500 people being taken out of the job market is not to be sniffed at.
Of course, with such a large number of people employed, the knock on effects in terms of other dependent jobs that will be generated cannot be over-emphasised, nor can it be counted.
At the same time, with the refining capacity expected to reach 400,000 barrels of crude oil per day and producing a variety of refined fuel products from local crude resources, Nigeria will cut its current volumes of imported fuel products by a massive 50%.
This figure easily rivals the NNPC’s four existing refineries at their current capacity. In addition, the fertilizer factory will essentially bring to a halt the importation of fertilizer in Nigeria. And this will create a massive boon for our agricultural sector, which also happens to be our largest employer of labour.
If the successes in cement and sugar are anything to go by; with Dangote Sugar on one hand already having a 70% share of the Nigerian market, and Dangote Cement, on the other, being the highest capitalised equity on the Nigerian Stock Exchange, then we can say that good times are in front of us.
However, this is also a time to ask questions of the other oligarchs that the government of President Olusegun Obasanjo attempted to create.
Following his astute retirement of politically influential military officers from the Nigerian Army in 1999, Mr Obasanjo set about a reform programme that relied heavily on privatisation of state assets and liberalisation of the economy. Clearly, Mr Obasanjo’s reforms were founded on the philosophy of trickle-down economics, where he saw a situation in which empowering a few people, and making them succeed, would lead them to empower others.
The promise of free market capitalism, it was thought, depended after all on a band of super-capitalists who would transform the economy by creating wealth. This notion, insofar as the Dangote Group is concerned, is on the right track.
However, the question must be asked about the other super-capitalists that were created during the Obasanjo Administration. Where are they? What has happened to the preferential treatment given to certain banks, mobile phone companies, petroleum marketers, and other sundry conglomerates?
The real parting gift by the Obasanjo Administration to Nigerians was a new moneyed class, entrusted with the nation’s industry, and with the potential to take millions out of poverty by creating jobs, by the hundreds of thousands, with the attendant knock-on effects.
So far, only Aliko Dangote, has come anything close to achieving that dream.


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