This is a problem with a lot of large scale manufacturing in Nigeria. I don’t know the specifics, but it just seems obvious to me that Nigeria (and Nigerians) cannot compete globally in manufacturing products. It is difficult for Nigerian products to be globally competitive due, in part, to severe human capital constraints (Dangote’s refinery, for instance, hired 11k Indians just to help run it). Nigerians, of course, will never admit this and are quick to tell anyone who’s listening that we are rich in mineral and Human Resources. Another good point is what you mentioned about Dangote’s cement being run by Sinoma. That’s why every industry in Nigeria *really* hates importation. This isn’t a new problem either. I watched an Obasanjo interview in the 90s where he said he wouldn’t invest his money in Nigeria if the government cannot enact protectionist programs for him. So it isn’t just a Dangote problem — it’s a Nigerian capitalist problem. Faced with the fact that they cannot innovate and cannot compete globally, they run, cap in hand, to daddy government to ask for “gimmes”, and then turn around to tell the tired Nigerian on the street to be patriotic because the fruits of protectionism “will soon be here”. These fruits will never arrive. This is the exact drama playing out with farmers, and is it any surprise that Mr Bow tie is also one of the ones leading the charge against importation on that front as well. The more things change etc
All true. At a certain point it may not even be bad to import technology or manpower. The Chinese once bought an entire steel plant in Germany, dismantled it and then reassembled it in China to learn how to make steel. What is really crazy is that cement is not difficult to make or technologically challenging yet after making billions of dollars in profit from it for more than 2 decades, there is just zero technology transfer to Nigeria. It's really astonishing
Completely agree. Protectionism has hardly ever produced innovation. Especially when it is at the behest of national monopolies. But Alhaji cannot be accused of being innovative, he is simply one of Nigeria's savviest politicians.
Unfortunately for him, even politics cannot bail him out of Nigeria's disastrous oil industry. After all, there's a reason no other oil company has seen fit to build refineries in the country.
Actually, protectionism is usually a necessary part of industrial policy. It just has to be used with intelligence and not nearly to the level of what we have in Nigeria. Plus, after blocking imports, you need to give enough incentives to get people to come here and set up shop or to get the local companies to innovate, none of which we do properly
You are right. The prevailing economic thinking in the Nigerian society is that all imports are bad, and we must manufacture what we use at all costs, even if the imports will be cheaper. You will see people argue that local manufacturing of cement is creating jobs, so even if it is more expensive, it is a good trade-off. They are totally oblivious to the fact that cement is an input in construction and more construction will create way more jobs than cement manufacturing ever would, so there is an incentive to keeping cement prices low. It is exhausting because we as a people have internalised and enthroned the wrongest economic theories, while businessmen like Dangee know this and use it to their full advantage.
I must also confess to greatly enjoying his tears. But this has been his MO from day one. Build a company and lobby for protectionism within that industry. The first time he has faced significant pushback, because nobody supports nationalism when it comes to energy, he folds, flops and moans.
Will it be great to have an operating refinery at that scale? Yes. But Dangote must prove he is a businessman and make it profitable. Rather than opening his Rolodex to call his government buddies.
But why do we Nigerians have to pay the market price for a commodity we have under us? I think the federal government should lease an untapped oil field to Dangote so that he can extract and refine it at a cheaper rate for Nigerians.
This is a problem with a lot of large scale manufacturing in Nigeria. I don’t know the specifics, but it just seems obvious to me that Nigeria (and Nigerians) cannot compete globally in manufacturing products. It is difficult for Nigerian products to be globally competitive due, in part, to severe human capital constraints (Dangote’s refinery, for instance, hired 11k Indians just to help run it). Nigerians, of course, will never admit this and are quick to tell anyone who’s listening that we are rich in mineral and Human Resources. Another good point is what you mentioned about Dangote’s cement being run by Sinoma. That’s why every industry in Nigeria *really* hates importation. This isn’t a new problem either. I watched an Obasanjo interview in the 90s where he said he wouldn’t invest his money in Nigeria if the government cannot enact protectionist programs for him. So it isn’t just a Dangote problem — it’s a Nigerian capitalist problem. Faced with the fact that they cannot innovate and cannot compete globally, they run, cap in hand, to daddy government to ask for “gimmes”, and then turn around to tell the tired Nigerian on the street to be patriotic because the fruits of protectionism “will soon be here”. These fruits will never arrive. This is the exact drama playing out with farmers, and is it any surprise that Mr Bow tie is also one of the ones leading the charge against importation on that front as well. The more things change etc
All true. At a certain point it may not even be bad to import technology or manpower. The Chinese once bought an entire steel plant in Germany, dismantled it and then reassembled it in China to learn how to make steel. What is really crazy is that cement is not difficult to make or technologically challenging yet after making billions of dollars in profit from it for more than 2 decades, there is just zero technology transfer to Nigeria. It's really astonishing
Protectionism did work for the Asian Tigers though. Even for the United States of America in the late 1800s.
Completely agree. Protectionism has hardly ever produced innovation. Especially when it is at the behest of national monopolies. But Alhaji cannot be accused of being innovative, he is simply one of Nigeria's savviest politicians.
Unfortunately for him, even politics cannot bail him out of Nigeria's disastrous oil industry. After all, there's a reason no other oil company has seen fit to build refineries in the country.
Actually, protectionism is usually a necessary part of industrial policy. It just has to be used with intelligence and not nearly to the level of what we have in Nigeria. Plus, after blocking imports, you need to give enough incentives to get people to come here and set up shop or to get the local companies to innovate, none of which we do properly
You are right. The prevailing economic thinking in the Nigerian society is that all imports are bad, and we must manufacture what we use at all costs, even if the imports will be cheaper. You will see people argue that local manufacturing of cement is creating jobs, so even if it is more expensive, it is a good trade-off. They are totally oblivious to the fact that cement is an input in construction and more construction will create way more jobs than cement manufacturing ever would, so there is an incentive to keeping cement prices low. It is exhausting because we as a people have internalised and enthroned the wrongest economic theories, while businessmen like Dangee know this and use it to their full advantage.
I must also confess to greatly enjoying his tears. But this has been his MO from day one. Build a company and lobby for protectionism within that industry. The first time he has faced significant pushback, because nobody supports nationalism when it comes to energy, he folds, flops and moans.
Will it be great to have an operating refinery at that scale? Yes. But Dangote must prove he is a businessman and make it profitable. Rather than opening his Rolodex to call his government buddies.
But why do we Nigerians have to pay the market price for a commodity we have under us? I think the federal government should lease an untapped oil field to Dangote so that he can extract and refine it at a cheaper rate for Nigerians.
There you have it :)
Well I didn't know we had refined oil underneath us
And how would that be any cheaper? There would be associated extraction costs?
This probably explains best why the local refineries shut down, since they were being subsidized anyway to produce........