I appreciate the depth of your argument, but I think some points deserve a second look. It seems you frame Dangote’s success mainly through a trader mindset, yet the shift from trading to large scale production could also be seen as a step toward industrial maturity, even if imperfect. High margins in Nigeria may reflect systemic costs like poor infrastructure and currency swings, not just greed or protectionism.
Also, calling the trader mentality the core obstacle might overlook how weak public institutions and inconsistent policy create an uneven field for any manufacturer. The government’s role in regulation, logistics, and financing probably weighs heavier on outcomes than corporate culture alone.
Your broader point about who really benefits from industrialisation is valid, but maybe the real challenge is not just changing mindsets. It is building the state capacity and market stability that make true competition possible.
I’m tired tired TIRED of this argument that high margins in Nigeria reflect higher costs. You have to pick one because you can’t have it both ways. Nigeria cannot be a high cost environment and high margin market at the same time. This is illogical. Only one can be true at a time.
I see your point, but high cost and high margin can absolutely coexist when a firm controls pricing. China National Tobacco is a clear case. It faces heavy costs from regulation and logistics yet still posts margins above 70 percent because it dominates a protected market.
So the issue is not logical inconsistency
it’s market power. When competition is weak, companies can charge well above cost, no matter how expensive their operations are.
We are in agreement. My point is that they are not linked in the way people try to claim they are. High margins are not because of high costs. Where they exist together it is because of pricing power. Without pricing power, a high cost producer surely cannot magic high margins out of thin air. In Dangote's case, government is doing a lot of the heavy lifting by protecting him from competition. His costs are not high, in fact it is because they are low that they help to boost his margins, especially in cement
Great article as always folks. Is there an argument to be made broadly around state maturity. One where the state had to make industrialization in key sectors extremely attractive (including picking winners in Dangote’s case) to get the first tranche of players to enter risky spaces. In future phases, the proliferation of talent, expertise and (hopefully) a strategic pivot by the government to fostering competition drive innovation and prices down.
Counterpoint to the above argument is that this has not happened in Cement yet.
The trading mentality is VERY old culturally and entrenched. See Mansa Musa
I appreciate the depth of your argument, but I think some points deserve a second look. It seems you frame Dangote’s success mainly through a trader mindset, yet the shift from trading to large scale production could also be seen as a step toward industrial maturity, even if imperfect. High margins in Nigeria may reflect systemic costs like poor infrastructure and currency swings, not just greed or protectionism.
Also, calling the trader mentality the core obstacle might overlook how weak public institutions and inconsistent policy create an uneven field for any manufacturer. The government’s role in regulation, logistics, and financing probably weighs heavier on outcomes than corporate culture alone.
Your broader point about who really benefits from industrialisation is valid, but maybe the real challenge is not just changing mindsets. It is building the state capacity and market stability that make true competition possible.
I’m tired tired TIRED of this argument that high margins in Nigeria reflect higher costs. You have to pick one because you can’t have it both ways. Nigeria cannot be a high cost environment and high margin market at the same time. This is illogical. Only one can be true at a time.
It is a very strange argument to say the least. Like it is so hard to do business in Nigeria, you earn extraordinarily high profits in return.
I see your point, but high cost and high margin can absolutely coexist when a firm controls pricing. China National Tobacco is a clear case. It faces heavy costs from regulation and logistics yet still posts margins above 70 percent because it dominates a protected market.
So the issue is not logical inconsistency
it’s market power. When competition is weak, companies can charge well above cost, no matter how expensive their operations are.
We are in agreement. My point is that they are not linked in the way people try to claim they are. High margins are not because of high costs. Where they exist together it is because of pricing power. Without pricing power, a high cost producer surely cannot magic high margins out of thin air. In Dangote's case, government is doing a lot of the heavy lifting by protecting him from competition. His costs are not high, in fact it is because they are low that they help to boost his margins, especially in cement
Great article as always folks. Is there an argument to be made broadly around state maturity. One where the state had to make industrialization in key sectors extremely attractive (including picking winners in Dangote’s case) to get the first tranche of players to enter risky spaces. In future phases, the proliferation of talent, expertise and (hopefully) a strategic pivot by the government to fostering competition drive innovation and prices down.
Counterpoint to the above argument is that this has not happened in Cement yet.
But What can we do? Should we just accept our fate?
Multiple Nigerians now have to once more rely on a system that's faulty even though is pivotal to their well being.
Sad
Truly, the men who didn't build Nigeria.
But set it up to be milked.
At this point, it won’t be absurd to say Dangote is more powerful than any Nigerian alive.
*African.