Cullinan, Frasch, Blaustein and others didn't leave Standard Oil to be generous. They left because they and the firm had built something worth leveraging, and a competitive market outside was willing to reward the leverage. For Dangote, the question isn't just "where is the diaspora", it's what would have created the pressure to build something worth diffusing in the first place.
It's worth noting what Dangote has clearly figured out: reading the political landscape accurately, building protection that proved durable, scaling at a pace most firms don't manage. Those are real capabilities. The sadder part of the Rockefeller comparison is the counterfactual: what if the same drive and scale were applied to competitive markets, with performance conditions?
Political protection without competitive discipline removes the pressure to build something worth diffusing. There's nothing to leverage out, because there was never an incentive to build it in. The talent, as you observe, was imported.
The Asian Tiger line is worth following further. The chaebol were also politically connected and protected. What was different was the attached export condition. Korean firms had to prove they could compete internationally, or they would lose the licence. That external discipline created the capability-investment pressure that the domestic market couldn't generate.
The harder part of that comparison is whether the condition was the cause or whether governments able to impose and hold it were already different in kind. A Nigerian state that could enforce an export-performance requirement on Dangote would be a different kind of state from the one that issued the licence.
That gap is the harder problem, and probably the one Opalo's question is really pushing at.
He spends a considerable amount of resources buying influence in governments. So it is also a story of the tail wagging the dog. When you look at how the refinery was conceived and executed, it was clearly aimed at making it too big to fail and to tie the country into his orbit. There were multiple visits by the presidency while the project was at sand filling stage. It was commissioned multiple times.
Exactly. The buck stops at the government's table, not Dangote's. The state has refused to impose export discipline or any kind of competition on his industries. And he, like any other businessman with no constraints, has taken the path of least resistance.
The Nigerian state is culpable. Weak states get captured. But Dangote isn't a passive beneficiary. He lobbied for import bans, sued to block fuel competition, and holds limestone concessions far beyond his needs. That's not 'the government allowed him.' That's 'he shaped what the government allowed.'
The 'blame the state' frame lets him off too easy. Every oligarch in history had a weak state to work with. The question is whether his model builds an industrial base or a personal empire. A fuel price swing, cement cheaper abroad than at home, and wages falling while profits treble tell you this man's story. The state failed. He actively widened the gap. Both can be true. But only one of them is selling it as national industrialization.
This is Nigeria, not the United States. The capitalist class makes money at the pleasure of the political class. Whatsoever Dangote has achieved, it's because the politicians let him do so. They can destroy him as quick as they made him.
It's just that the political class has no vision. That's why they can't direct his industrialisation to reasonable ends. Obasanjo had the vision, that's why he invited Dangote to manufacture cement locally. His successors, on the other hand, have not managed its consequence well enough, and we're where we are today.
You mention other oligarchs working with the state. But that's the thing, the oligarchs in places like South Korea also went through the path of least resistance until Park Cheung Hee called them to order and told them to either shape up or go home. He even put them in jail for them to know who is boss.
We've not had any political leader with similar vision. Tinubu might be said to have his own template, but it's undoubtedly more of a laissez faire-IMF vision than an industrialisation vision. Which is why Dangote should be president. He at least has industrialisation as a vision.
The "this is Nigeria" framing asks Nigerians to accept lower standards. But monopoly pricing harms consumers in Lagos or London. Economic gravity does not change at the border.
Your theory treats Dangote as a passive beneficiary of state favor. He is not. He lobbied for cement import bans, sued to block fuel imports, and holds limestone concessions decades beyond his needs. He co-opts politicians and embeds his interests into policy. A leader who wants to discipline him finds him already inside the tent.
The claim that politicians can destroy him as quickly as they made him ignores how power works. Dominate cement, sugar, salt, fertilizer, and fuel and you become harder to dislodge. The state made him. He has since made the state dependent on him.
You praise Obasanjo's vision but skip its design flaw. The backward integration policy of 2002 had no sunset clauses, export quotas, or graduation timeline. It was permanent protection, not temporary support. Dangote spent twenty years keeping it that way. That is a policy captured at birth, not successor failure.
Your Park Chung Hee example undermines your case. Park jailed oligarchs, forced export discipline, and imposed performance standards. Dangote has fought every one of those. Invoking Park to defend him is like invoking a strict teacher to excuse a student who bribed the principal.
Tinubu running a laissez-faire vision is not true. Naira for crude, tax holidays, and import restrictions are the opposite of laissez faire. It is state capitalism without the market. And for avoidance of doubt, this was what his government and in broader view (his party) had done for Dangote. So the industrialist vision is essentially just wherever talking points sits...lol, no now.
Finally, Dangote for president, come on mahn. How now??? A man who dominates cement, sugar, salt, fertilizer, and fuel would regulate markets in which he has dominant stakes. That is not industrial policy. It is self-dealing with a presidential seal.
The buck stops at the state. But the man at that table should not be the one who bought the chairs.
A few of the comments touch on this, but the symbiotic dynamic is worth naming directly. Privileges attract people to become insiders. Insiders use their position to seek more privileges. And the more entrenched the insider class, the less competitive any alternative strategy becomes for the next entrepreneur looking to scale.
That path is self-reinforcing, not because everyone is corrupt, but because the system makes insider-seeking the rational move. Anyone with Dangote's drive and political instinct who chose the (outsider) capability-building route instead would be competing on a field that doesn't reward it, against an incumbent who doesn't need to compete at all. The pattern reproduces itself through individually rational choices.
Which is why the policy question is so hard. You're not trying to find a better entrepreneur. You're trying to make insider-seeking less rewarding than building, which means changing what the political economy offers to those with the scale and ambition to demand it. And that is no easy task!
Quite agree with your summations, but two wrongs don't make a right.
Even if he made the rational choice given the system he found himself in, he is now in a position to make changes to his own practices without much threat to his position. At this stage, he can pursue technology learning, develop local talent, invest in research and development, and support the development of related and supporting industries.
He could help spur real ecosystems and put his money where his mouth is about truly industrializing the country. There are many ways to Rome; some might take longer, and people like him can have a tremendous effect despite the government's failure to enforce export discipline on him and others.
There's nothing for Dangote to resist when the state doesn't have a sense of direction. It's just Tinubu that is giving Dangote headache by giving import licenses and so on. Which is why I say Tinubu leans towards laissez faire/IMF economics.
So, Dangote isn't resisting things like export quotas. The politicians just don't care and have no vision and so he does what he wants.
"The Asian Tiger line is worth following further. The chaebol were also politically connected and protected. What was different was the attached export condition. Korean firms had to prove they could compete internationally, or they would lose the license. That external discipline created the capability-investment pressure that the domestic market couldn't generate."
Which likely forced the chaebol's to invest in producing talent or at least incentivizing the government to do so.
Standard Oil***, Rockefeller, others people know of, also operated in a very different world where they were never, ever, not once, anywhere near as powerful or influential as we're told they were and always had to both compete and negotiate with a diverse array of business, governments (notice how governments is plural, thats a key thing, and I mean domestically), and numerous political organizations. This is because they operated in a deliberately structurally decentralized, decision-making and authority diffused and institutionally pluralized system
It was a decentralized and pluralized financial system where tens of thousands of commercial banks, mutuals, insurers, pension-like funds, local investors, and regional institutions were deeply embedded in local industrial, municipal, educational, scientific, agricultural, and civic socio-political ecosystems. A sectorally plural, geographically plural, locally responsive, and institutionally federated capital system
At least in most places outside of the South (but much of the South as well), the public sector one with local fiscal primacy with the local tier was the biggest revenue in-taker and spender and having broad locally directed autonomy as what the local government did with its own money, and where gov and regs were controlled by decentralized/heavily locally anchored mass member parties who operated in an environment of substantial legal and regulatory variability and policy variability (it was still one system, like China today they had a high quality organizational design that allowed for beneficial frictions while keeping negative ones quite minimal), while the private sector was structurally biased toward geographically dispersed mid-sized firms rather than today’s nationally centralized corporate-financial command chains.
*** Standard Oil started to move towards being able to accomplish far too much national scale centralized coordination through its syndication agreements; so something was quickly done about it
Yet to read it. But I'll quickly drop this comment - Dangote for President 😁
Edit: Finally read it. Yes. Dangote has his issues no doubt. Major issues. But the main reason why I'm a fanboy is primarily because of the topic hechooses to highlight - The Industrialization of the African Continent.
The Industrialization of Africa is an imperative. It's something that we must do if we're to be taken seriously. The descendants of people whose ancestors were conquered en masse because of the industrial revolution should not be sitting back and be thinking of laissez faire economics. Industrialization is a must.
Prior to Dangote, barely anyone in Africa was talking about it. Everyone was stuck on the whole neoliberal kool aid of "let the market decide".
Now with someone like Dangote preaching the industrialization imperative left, right, and center it has now become top of mind. And people, like you, can now analyse his approach and point out where his failings are.
Ultimately, if we're looking at progress towards industrialisation, Dangote's presence is a plus. Not a minus. It might be a plus 1 as opposed to plus 5, but it is still a plus regardless. Better to have a Dangote refinery that isn't optimal than to have no refinery at all. At least with the refinery on ground, we can talk of policy choices to steer it in the right direction. You won't have that if there is nothing on ground and we were all waiting for "the market to decide".
Actually... I think it's even beyond letting the market decide. It's cool to let the market decide anyways but not for an industry like oil, particularly in Nigeria. The capital requirement is massive and the risks, I doubt any random Nigerian would be willing to go for it.
What could have been a control to his rising monopolistic agenda and power, a competitor; let's just say it is even though we know it's not; NNPC, hasn't been efficient. Dangote's presence brought out its inefficiencies and instead of it to become more efficient, which will even raise the competition, it started yapping about him being a capitalist and the negative side of capitalism.
I read an article that talked about this and in the article, a capitalist competitor seemed to be like the biggest catalyst the Nigerian oil industry needed cos it was rather saddening to see that NNPC could decide to come against Dangote's production simply because he made the production (or the retail 🌚) more efficient.
I don't know if that was supposed to turn Nigerians away from Dangote but I think that did quite the perfect opposite cos almost everyone now think Dangote is the saviour Nigeria was destined to have.
While I do agree that Dangote's claim is "industrializing Nigeria" is clearly a deception, I'd say his deception is further prospered by the inability of the government and the NNPC to put a check to his power, not necessarily by making heavy laws to force him out of the market, but to create a competitive business environment where he won't even think his contribution to Nigeria's development would earn him a medal or a trophy; that's if he was actually contributing to the economic development anyways.
Cement was first manufactured in Nigeria in 1959. Some of the plants that Dangote bought (before he built his own) were the old plants that had been built decades before.
I don't get the point you're driving at. Whatever cement was produced in 1959 or whenever wasn't enough to meet domestic demand, which is why we had the cement armada in the 70s.
There's a similar phenomenon in East Africa, specifically Kenya with regards to Safaricom. Our vaunted "big tech" company that imports 90% of its software and 100% of its hardware from China while local employees do installation, localisation and IT work.
This seems to be an African phenomenon in general in that it's far too easy to import solutions, there's no stomach for protectionism especially because a populist president will come along and open the market to get cheap wins and there's external companies specialising in making a market out of this problem meaning that you have to compete with far more efficient processes and economies of scale from the start.
Yes it is and it does not need to be permanent. We need to start moving the grounds of the debate to actual technology mastery otherwise the continent cannot move forward. Ok, you've been importing machines and manufacturing for years. It's to put on big boy pants and start actually owning the technology.
When I was growing up, my late brother used to make a joke that if Dangote was broke, all he needed to do was add NGN1 to the price of Cement the next morning.
I think this monopolistic tendencies is the reason why Africa is where Africa is in the first place, as long as me and my family members are okay, everyone else can kiss the grass for all I care. These businesses or industries are not built with growing the economy in mind, only an avenue for one person to extract maximum wealth and build a conglomerate for himself and his family in perpetuity, same for the average Nigeria politician.
If you look at it, even the banks have done a better job. Developed capacity strong enough to create more capacity.
Last year the way his profit numbers shot up was so crazy. And the sold almost the exact same amount of cement compared with the previous year (with costs only going up a small amount). It was as if he set a profit amount he needed to make and then worked backwards to the price increase to make it happen and just put ti through.
I beg to differ . Nigerian banks have done exceptionally well in posting astronomical profits on their books . They are yet to develop the economy. An economy should not only reflect figures but address essential products and values of her citizens. Feyi’s article about Dangote’s industrialisation mantra were utterly a stretch too far ; but he made few poignant points of a country where billionaires are multiplying and innovation or highly skilled indigenous workforce are nonexistent. Most of the mechanical systems of Dangote’s empire are imported, likewise Starbucks coffee beans are chiefly from Ethiopia and Columbia . Thus , If one dares to become an industrialist , that is - a problem solver in which outcomes become globally significant then the road to follow is leverage. The question is should I wait for a Nigerian to invent a Solar system first before I acquire it ( who knows when ) or purchase what is in the market currently lest I don’t perish in unproductive misery ?
reading this piece immediately reminded me of an article i read sometime ago about "why china got rich and india didn't" https://davidoks.substack.com/p/why-china-got-rich-and-india-didnt?r=25hhrc&utm_medium=ios the parallel is so clear. you cannot industrialize a country or a whole continent through a single company or billionaire without building the actual people first. it just doesn't work. if you're importing foreign talent and foreign tech to run a factory behind a government-enforced monopoly wall, you're not building capability. you're just protecting a monopoly
Feyi is Dangote's biggest fan, I dare say. What reads as a caustic criticism is actually a sincere call to make some amends in his business practices. Feyi is a Nigerian through through and he understands the anyhowness around how things are done in Africa and what the likes of Dangote are doing to stay above water. But still, let him do more about building local capabilities; actively invest in R&D, do more responsible pricing for his products (e.g. 60% margin on overpriced cement at 12,000 Naira is bad enough; fuel price at DR gantry was 780 at crude oil price of $70 before Iran War. Today, after the war, fuel is still at at 1200 when crude price has dropped to $72).
Yep. They literally spend nothing on R&D and I widened my search as much as possible in their accounts. What you’ll find is stuff like donating some money to a secondary school or something.
The lack of talent diffusion also applies to Reliance and Adani, the two giant Indian conglomerates. On the other hand, Tata, which has a unique ownership structure, being majority owned by a philanthropic trust, has founded many national institutions. Total R&D spending in India is negligible though.
This piece needs to be read along with the podcast with Carlos Barragan on the entrenchment of the 'Yahoo Boy' culture in Lagos. As I understand it, his critique is about the entire social-political economy not simply a single firm. The whole system. From head to toe. Hard to see how things can continue like this.
I like what I am learning. I subscribed so that I can learn more about Nigeria.
It seems that you could also evaluate any contribution or claimed contribution using Clayton Christensen's model for innovation. Ask the question, is the innovation or investment into Nigeria tapping into a non-consumption market? If it is, then it will pull other investments and create jobs in Nigeria. I believe when Nigerians can tap into this idea, things can change for the better.
Is the innovation or investment a sustaining innovation or investment? If it is yes, then the impact will be much smaller than the first.
Finally, is the innovation or investment a efficiency innovation or investment? If it is, then the impact for other investments and job creation can be negative.
Most companies operating in Nigeria can be viewed and classified into these categories.
However, you may be making the point that there is another category for companies. A category that is like a cement block on the feet of Nigeria.
Dangote is a physical commodity trader. He's just one that moved up the supply chain to actually start manufacturing...and his businesses reflect that. This doesn't necessarily make him as horrible as you make him out to be. But I do think the govt should take more action to open his firms up to indigenous competition.
There are numerous examples of big commodity trading firms moving up the supply chain like Dangote did. In Energy Trading, firms like Vitol, Trafigura, Gunvor moved from just oil trading to refining. It would be interesting to research if these firms operate similar to Dangote wrt lack of engineering innovation/development. I would suspect we'd find similar results.
> Rockefeller incorporated Standard Oil in 1870, alongside William Rockefeller, Samuel Andrews, Henry Flagler, Stephen Harkness and others.
Rockefeller himself was a bookkeeper; so a finance guy - similar to Dangote.
Samuel Andrews, however, was essentially a petroleum/chemical engineer. He started out as a candlemaker then got a job in a firm that became the first in Cleveland to refine kerosene from crude oil (R&D).
Stephen Harkness was also probably an engineer. He was a harness-maker before going on to found a distillery.
> already ran its own cooperage, storage tanks, warehouses, and plants turning out paint and glue. It was a capability machine, spanning everything from refining to finance to R&D
I wouldn't be surprised if all these engineering "capabilities" were driven by Andrews and Harkness.
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I think what we've hit on is that firms founded by Engineers and that do engineering, might be what we need to get the "capability dividend" in our economies.
It would be interesting to do some research into Nigerian firms that fit the above description. Well, software is replete with examples...but focusing more on "real economy" engineering firms.
'Where is the talent that cut its teeth inside Dangote Cement and carried that capability out into the wider economy? Where is the Dangote Mafia? Where are the bright young engineers, trained at Dangote Cement, who have gone on to found the cement-adjacent Nigerian firms...'
Could it be that there are none because Nigerian unis suck?
Recall Yale's Prof. Silliman validated the commercial prospects of Edwin Drake's find and thus ensured investment would flow to the emerging crude oil industry. Which Nigerian professor is similarly eminent --- if not globally, then at least continentally.
As you well know, between Asuu and TETFund, our esteemed profs gulp the bulk of our national expenditure on education. If Dangote is the most blessed Nigerian, then professors have to be the most Nigerian civil servants. And in exchange for the billions lavished on their industry, did we even get out of it a measly plant or refinery?
Where do our engineering departments rank globally? Have any of the unis placed their feet down in the pursuit of higher standards?
The Brits, the Yanqs, the Asian Tigers, and China all had top-notch feeder institutions that helped seed their industrialisation by setting standards and feeding talent. Nigeria has none. Perchance, our beloved Alhaji is simply the manifestation of our hidden malaise.
I've come around to treating the Nigerian (and broader Tropical --- tropics lag the temperate region, it's not an 'Africa' thing --- ) question as one schizoprenia or any other malady. The patient is not cursed or at fault. Illness is not evidence of inherent weakness, but of some external or internal disruption that prevents the body — or in this case, Nigeria — from carrying out its normal functions.
I suppose the question that needs answering is whether Alhaji is the fever or Plasimodium Falciparium. My gut says the former, but I'm also searching for any single and willing ladies working at that refinery, so I get small bias o:
It's important not to over essentialist Nigeria. I included a driver on the list for this very reason - big companies are capability machines, or they are supposed to be. Yes, engineers will need an education but nothing beats what you learn inside a firm. That is where the bulk of the education ought to happen. So Dangote as an industrial firm ought to be able to take even raw talent and 'finish' it. This is the point. That's why someone could join Rockefeller as a driver, learn the ropes and go start his own distribution business. He was obviously a very smart guy even when he was a driver but he needed to be finished inside that capability machine.
Interesting macro question. Africa’s industrialization story will likely be shaped by whoever brings long term capital, infrastructure, and manufacturing expertise rather than short term extraction. The biggest opportunity may be in building local value chains, not just exporting raw materials.
The difference between an industrialist and a premier rent-seeker lies entirely in the ecosystem they leave behind.
Feyi hits the nail on the head here. True industrialization isn’t just about the volume of product moved or the height of a billionaire's net worth; it is about systemic capability, talent incubation, and R&D.
Where the historical giants of industry seeded entire generations of spin-off enterprises, engineers, and adjacent technologies, the Dangote model operates in reverse:
- Talent Hoovering vs. Talent Seeding: Importing fully baked expertise from competitors rather than building an internal pipeline of mastery.
- Arbitrage over Innovation: Relying on regulatory capture, protectionism, and buying turn-key foreign technology to extract margins from a captive market, rather than developing proprietary technical depth.
When a dominant player spends zero on R&D, the wider economy doesn't get "industrialized" it gets squeezed. It's a masterclass in ruthless business acumen, but let’s stop confusing market dominance via state backing with genuine economic transformation.
Cullinan, Frasch, Blaustein and others didn't leave Standard Oil to be generous. They left because they and the firm had built something worth leveraging, and a competitive market outside was willing to reward the leverage. For Dangote, the question isn't just "where is the diaspora", it's what would have created the pressure to build something worth diffusing in the first place.
It's worth noting what Dangote has clearly figured out: reading the political landscape accurately, building protection that proved durable, scaling at a pace most firms don't manage. Those are real capabilities. The sadder part of the Rockefeller comparison is the counterfactual: what if the same drive and scale were applied to competitive markets, with performance conditions?
Political protection without competitive discipline removes the pressure to build something worth diffusing. There's nothing to leverage out, because there was never an incentive to build it in. The talent, as you observe, was imported.
The Asian Tiger line is worth following further. The chaebol were also politically connected and protected. What was different was the attached export condition. Korean firms had to prove they could compete internationally, or they would lose the licence. That external discipline created the capability-investment pressure that the domestic market couldn't generate.
The harder part of that comparison is whether the condition was the cause or whether governments able to impose and hold it were already different in kind. A Nigerian state that could enforce an export-performance requirement on Dangote would be a different kind of state from the one that issued the licence.
That gap is the harder problem, and probably the one Opalo's question is really pushing at.
He spends a considerable amount of resources buying influence in governments. So it is also a story of the tail wagging the dog. When you look at how the refinery was conceived and executed, it was clearly aimed at making it too big to fail and to tie the country into his orbit. There were multiple visits by the presidency while the project was at sand filling stage. It was commissioned multiple times.
And for the actual building and technology? The Chinese did all of that https://www.scmp.com/news/china/diplomacy/article/3352256/fuelling-continent-how-chinas-engineering-prowess-built-africas-biggest-oil-refinery
Exactly. The buck stops at the government's table, not Dangote's. The state has refused to impose export discipline or any kind of competition on his industries. And he, like any other businessman with no constraints, has taken the path of least resistance.
The Nigerian state is culpable. Weak states get captured. But Dangote isn't a passive beneficiary. He lobbied for import bans, sued to block fuel competition, and holds limestone concessions far beyond his needs. That's not 'the government allowed him.' That's 'he shaped what the government allowed.'
The 'blame the state' frame lets him off too easy. Every oligarch in history had a weak state to work with. The question is whether his model builds an industrial base or a personal empire. A fuel price swing, cement cheaper abroad than at home, and wages falling while profits treble tell you this man's story. The state failed. He actively widened the gap. Both can be true. But only one of them is selling it as national industrialization.
This is Nigeria, not the United States. The capitalist class makes money at the pleasure of the political class. Whatsoever Dangote has achieved, it's because the politicians let him do so. They can destroy him as quick as they made him.
It's just that the political class has no vision. That's why they can't direct his industrialisation to reasonable ends. Obasanjo had the vision, that's why he invited Dangote to manufacture cement locally. His successors, on the other hand, have not managed its consequence well enough, and we're where we are today.
You mention other oligarchs working with the state. But that's the thing, the oligarchs in places like South Korea also went through the path of least resistance until Park Cheung Hee called them to order and told them to either shape up or go home. He even put them in jail for them to know who is boss.
We've not had any political leader with similar vision. Tinubu might be said to have his own template, but it's undoubtedly more of a laissez faire-IMF vision than an industrialisation vision. Which is why Dangote should be president. He at least has industrialisation as a vision.
Once again, the buch stops at the state's table.
The "this is Nigeria" framing asks Nigerians to accept lower standards. But monopoly pricing harms consumers in Lagos or London. Economic gravity does not change at the border.
Your theory treats Dangote as a passive beneficiary of state favor. He is not. He lobbied for cement import bans, sued to block fuel imports, and holds limestone concessions decades beyond his needs. He co-opts politicians and embeds his interests into policy. A leader who wants to discipline him finds him already inside the tent.
The claim that politicians can destroy him as quickly as they made him ignores how power works. Dominate cement, sugar, salt, fertilizer, and fuel and you become harder to dislodge. The state made him. He has since made the state dependent on him.
You praise Obasanjo's vision but skip its design flaw. The backward integration policy of 2002 had no sunset clauses, export quotas, or graduation timeline. It was permanent protection, not temporary support. Dangote spent twenty years keeping it that way. That is a policy captured at birth, not successor failure.
Your Park Chung Hee example undermines your case. Park jailed oligarchs, forced export discipline, and imposed performance standards. Dangote has fought every one of those. Invoking Park to defend him is like invoking a strict teacher to excuse a student who bribed the principal.
Tinubu running a laissez-faire vision is not true. Naira for crude, tax holidays, and import restrictions are the opposite of laissez faire. It is state capitalism without the market. And for avoidance of doubt, this was what his government and in broader view (his party) had done for Dangote. So the industrialist vision is essentially just wherever talking points sits...lol, no now.
Finally, Dangote for president, come on mahn. How now??? A man who dominates cement, sugar, salt, fertilizer, and fuel would regulate markets in which he has dominant stakes. That is not industrial policy. It is self-dealing with a presidential seal.
The buck stops at the state. But the man at that table should not be the one who bought the chairs.
A few of the comments touch on this, but the symbiotic dynamic is worth naming directly. Privileges attract people to become insiders. Insiders use their position to seek more privileges. And the more entrenched the insider class, the less competitive any alternative strategy becomes for the next entrepreneur looking to scale.
That path is self-reinforcing, not because everyone is corrupt, but because the system makes insider-seeking the rational move. Anyone with Dangote's drive and political instinct who chose the (outsider) capability-building route instead would be competing on a field that doesn't reward it, against an incumbent who doesn't need to compete at all. The pattern reproduces itself through individually rational choices.
Which is why the policy question is so hard. You're not trying to find a better entrepreneur. You're trying to make insider-seeking less rewarding than building, which means changing what the political economy offers to those with the scale and ambition to demand it. And that is no easy task!
Quite agree with your summations, but two wrongs don't make a right.
Even if he made the rational choice given the system he found himself in, he is now in a position to make changes to his own practices without much threat to his position. At this stage, he can pursue technology learning, develop local talent, invest in research and development, and support the development of related and supporting industries.
He could help spur real ecosystems and put his money where his mouth is about truly industrializing the country. There are many ways to Rome; some might take longer, and people like him can have a tremendous effect despite the government's failure to enforce export discipline on him and others.
There's nothing for Dangote to resist when the state doesn't have a sense of direction. It's just Tinubu that is giving Dangote headache by giving import licenses and so on. Which is why I say Tinubu leans towards laissez faire/IMF economics.
So, Dangote isn't resisting things like export quotas. The politicians just don't care and have no vision and so he does what he wants.
"The Asian Tiger line is worth following further. The chaebol were also politically connected and protected. What was different was the attached export condition. Korean firms had to prove they could compete internationally, or they would lose the license. That external discipline created the capability-investment pressure that the domestic market couldn't generate."
Which likely forced the chaebol's to invest in producing talent or at least incentivizing the government to do so.
Agree. The Korean method was to use the international markets as the disciplining factor.
> "where is the diaspora"
> Rockefeller comparison
I made a comment that tries to explain/examine the missing "diaspora" and delves deeper into the Rockefeller/Standard Oil comparison: https://substack.com/profile/1317848-omolomo/note/c-283496233?utm_source=substack&utm_content=first-note-modal
Standard Oil***, Rockefeller, others people know of, also operated in a very different world where they were never, ever, not once, anywhere near as powerful or influential as we're told they were and always had to both compete and negotiate with a diverse array of business, governments (notice how governments is plural, thats a key thing, and I mean domestically), and numerous political organizations. This is because they operated in a deliberately structurally decentralized, decision-making and authority diffused and institutionally pluralized system
It was a decentralized and pluralized financial system where tens of thousands of commercial banks, mutuals, insurers, pension-like funds, local investors, and regional institutions were deeply embedded in local industrial, municipal, educational, scientific, agricultural, and civic socio-political ecosystems. A sectorally plural, geographically plural, locally responsive, and institutionally federated capital system
At least in most places outside of the South (but much of the South as well), the public sector one with local fiscal primacy with the local tier was the biggest revenue in-taker and spender and having broad locally directed autonomy as what the local government did with its own money, and where gov and regs were controlled by decentralized/heavily locally anchored mass member parties who operated in an environment of substantial legal and regulatory variability and policy variability (it was still one system, like China today they had a high quality organizational design that allowed for beneficial frictions while keeping negative ones quite minimal), while the private sector was structurally biased toward geographically dispersed mid-sized firms rather than today’s nationally centralized corporate-financial command chains.
*** Standard Oil started to move towards being able to accomplish far too much national scale centralized coordination through its syndication agreements; so something was quickly done about it
Yet to read it. But I'll quickly drop this comment - Dangote for President 😁
Edit: Finally read it. Yes. Dangote has his issues no doubt. Major issues. But the main reason why I'm a fanboy is primarily because of the topic hechooses to highlight - The Industrialization of the African Continent.
The Industrialization of Africa is an imperative. It's something that we must do if we're to be taken seriously. The descendants of people whose ancestors were conquered en masse because of the industrial revolution should not be sitting back and be thinking of laissez faire economics. Industrialization is a must.
Prior to Dangote, barely anyone in Africa was talking about it. Everyone was stuck on the whole neoliberal kool aid of "let the market decide".
Now with someone like Dangote preaching the industrialization imperative left, right, and center it has now become top of mind. And people, like you, can now analyse his approach and point out where his failings are.
Ultimately, if we're looking at progress towards industrialisation, Dangote's presence is a plus. Not a minus. It might be a plus 1 as opposed to plus 5, but it is still a plus regardless. Better to have a Dangote refinery that isn't optimal than to have no refinery at all. At least with the refinery on ground, we can talk of policy choices to steer it in the right direction. You won't have that if there is nothing on ground and we were all waiting for "the market to decide".
Actually... I think it's even beyond letting the market decide. It's cool to let the market decide anyways but not for an industry like oil, particularly in Nigeria. The capital requirement is massive and the risks, I doubt any random Nigerian would be willing to go for it.
What could have been a control to his rising monopolistic agenda and power, a competitor; let's just say it is even though we know it's not; NNPC, hasn't been efficient. Dangote's presence brought out its inefficiencies and instead of it to become more efficient, which will even raise the competition, it started yapping about him being a capitalist and the negative side of capitalism.
I read an article that talked about this and in the article, a capitalist competitor seemed to be like the biggest catalyst the Nigerian oil industry needed cos it was rather saddening to see that NNPC could decide to come against Dangote's production simply because he made the production (or the retail 🌚) more efficient.
I don't know if that was supposed to turn Nigerians away from Dangote but I think that did quite the perfect opposite cos almost everyone now think Dangote is the saviour Nigeria was destined to have.
While I do agree that Dangote's claim is "industrializing Nigeria" is clearly a deception, I'd say his deception is further prospered by the inability of the government and the NNPC to put a check to his power, not necessarily by making heavy laws to force him out of the market, but to create a competitive business environment where he won't even think his contribution to Nigeria's development would earn him a medal or a trophy; that's if he was actually contributing to the economic development anyways.
The govt can always use export discipline to handle locally incubated monopolies.
In fact, it's recommended that you protect infant industries and then use export competitiveness to discipline them.
But the Nigerian state, as we all know, is sleeping.
But who or what is the infant industry here?
Refineries are definitely the infant industry at this point.
Cement was in the early 2000s. It has matured now, and if the state wasn't sleeping, imports would have been reintroduced to keep Alhaji on his toes.
Cement was first manufactured in Nigeria in 1959. Some of the plants that Dangote bought (before he built his own) were the old plants that had been built decades before.
I don't get the point you're driving at. Whatever cement was produced in 1959 or whenever wasn't enough to meet domestic demand, which is why we had the cement armada in the 70s.
Same for the ones that Dangote acquired.
Yet to read it. But I’ll quickly drop this comment…sigh! 🤦🏾♂️
WTH! 🙆🏾♂️
Sir?
There's a similar phenomenon in East Africa, specifically Kenya with regards to Safaricom. Our vaunted "big tech" company that imports 90% of its software and 100% of its hardware from China while local employees do installation, localisation and IT work.
This seems to be an African phenomenon in general in that it's far too easy to import solutions, there's no stomach for protectionism especially because a populist president will come along and open the market to get cheap wins and there's external companies specialising in making a market out of this problem meaning that you have to compete with far more efficient processes and economies of scale from the start.
Yes it is and it does not need to be permanent. We need to start moving the grounds of the debate to actual technology mastery otherwise the continent cannot move forward. Ok, you've been importing machines and manufacturing for years. It's to put on big boy pants and start actually owning the technology.
That's an interesting article!
The Paystack Mafia started about 5 or 6 years since the founding of Paystack, whereas no Dangote Mafia after 30 years of operations
I made a post trying to explain the lack of a mafia:
https://substack.com/profile/1317848-omolomo/note/c-283496233?utm_source=substack&utm_content=first-note-modal
😂😂
When I was growing up, my late brother used to make a joke that if Dangote was broke, all he needed to do was add NGN1 to the price of Cement the next morning.
I think this monopolistic tendencies is the reason why Africa is where Africa is in the first place, as long as me and my family members are okay, everyone else can kiss the grass for all I care. These businesses or industries are not built with growing the economy in mind, only an avenue for one person to extract maximum wealth and build a conglomerate for himself and his family in perpetuity, same for the average Nigeria politician.
If you look at it, even the banks have done a better job. Developed capacity strong enough to create more capacity.
Last year the way his profit numbers shot up was so crazy. And the sold almost the exact same amount of cement compared with the previous year (with costs only going up a small amount). It was as if he set a profit amount he needed to make and then worked backwards to the price increase to make it happen and just put ti through.
How is that different from how the Shop owner in Alaba increases his profit 😂
I beg to differ . Nigerian banks have done exceptionally well in posting astronomical profits on their books . They are yet to develop the economy. An economy should not only reflect figures but address essential products and values of her citizens. Feyi’s article about Dangote’s industrialisation mantra were utterly a stretch too far ; but he made few poignant points of a country where billionaires are multiplying and innovation or highly skilled indigenous workforce are nonexistent. Most of the mechanical systems of Dangote’s empire are imported, likewise Starbucks coffee beans are chiefly from Ethiopia and Columbia . Thus , If one dares to become an industrialist , that is - a problem solver in which outcomes become globally significant then the road to follow is leverage. The question is should I wait for a Nigerian to invent a Solar system first before I acquire it ( who knows when ) or purchase what is in the market currently lest I don’t perish in unproductive misery ?
reading this piece immediately reminded me of an article i read sometime ago about "why china got rich and india didn't" https://davidoks.substack.com/p/why-china-got-rich-and-india-didnt?r=25hhrc&utm_medium=ios the parallel is so clear. you cannot industrialize a country or a whole continent through a single company or billionaire without building the actual people first. it just doesn't work. if you're importing foreign talent and foreign tech to run a factory behind a government-enforced monopoly wall, you're not building capability. you're just protecting a monopoly
Feyi is Dangote's biggest fan, I dare say. What reads as a caustic criticism is actually a sincere call to make some amends in his business practices. Feyi is a Nigerian through through and he understands the anyhowness around how things are done in Africa and what the likes of Dangote are doing to stay above water. But still, let him do more about building local capabilities; actively invest in R&D, do more responsible pricing for his products (e.g. 60% margin on overpriced cement at 12,000 Naira is bad enough; fuel price at DR gantry was 780 at crude oil price of $70 before Iran War. Today, after the war, fuel is still at at 1200 when crude price has dropped to $72).
Saw someone listed as Head of R&D. Just for the show?
Yep. They literally spend nothing on R&D and I widened my search as much as possible in their accounts. What you’ll find is stuff like donating some money to a secondary school or something.
I sometimes look specifically for R & D on kilns in Nigeria.
The research papers are much fewer than one would expect with the number of cement companies we have.
There is no need to research when you can import the tech.
The lack of talent diffusion also applies to Reliance and Adani, the two giant Indian conglomerates. On the other hand, Tata, which has a unique ownership structure, being majority owned by a philanthropic trust, has founded many national institutions. Total R&D spending in India is negligible though.
Yes, Tata's weird ownership structure has the unintended(?) effect of encouraging a lot of entrepreneurship within the company.
This piece needs to be read along with the podcast with Carlos Barragan on the entrenchment of the 'Yahoo Boy' culture in Lagos. As I understand it, his critique is about the entire social-political economy not simply a single firm. The whole system. From head to toe. Hard to see how things can continue like this.
Thanks for the recommendation on the episode with Carlos Barragan!
I like what I am learning. I subscribed so that I can learn more about Nigeria.
It seems that you could also evaluate any contribution or claimed contribution using Clayton Christensen's model for innovation. Ask the question, is the innovation or investment into Nigeria tapping into a non-consumption market? If it is, then it will pull other investments and create jobs in Nigeria. I believe when Nigerians can tap into this idea, things can change for the better.
Is the innovation or investment a sustaining innovation or investment? If it is yes, then the impact will be much smaller than the first.
Finally, is the innovation or investment a efficiency innovation or investment? If it is, then the impact for other investments and job creation can be negative.
Most companies operating in Nigeria can be viewed and classified into these categories.
However, you may be making the point that there is another category for companies. A category that is like a cement block on the feet of Nigeria.
Thank you, and that is a good description!
Dangote is a physical commodity trader. He's just one that moved up the supply chain to actually start manufacturing...and his businesses reflect that. This doesn't necessarily make him as horrible as you make him out to be. But I do think the govt should take more action to open his firms up to indigenous competition.
There are numerous examples of big commodity trading firms moving up the supply chain like Dangote did. In Energy Trading, firms like Vitol, Trafigura, Gunvor moved from just oil trading to refining. It would be interesting to research if these firms operate similar to Dangote wrt lack of engineering innovation/development. I would suspect we'd find similar results.
> Rockefeller incorporated Standard Oil in 1870, alongside William Rockefeller, Samuel Andrews, Henry Flagler, Stephen Harkness and others.
Rockefeller himself was a bookkeeper; so a finance guy - similar to Dangote.
Samuel Andrews, however, was essentially a petroleum/chemical engineer. He started out as a candlemaker then got a job in a firm that became the first in Cleveland to refine kerosene from crude oil (R&D).
Also, see "The Chemical History of a Candle" by Michael Faraday to understand that candlemakers were essentially chemists (https://engineerguy.com/faraday/pdf/faraday-chemical-history-complete.pdf).
Stephen Harkness was also probably an engineer. He was a harness-maker before going on to found a distillery.
> already ran its own cooperage, storage tanks, warehouses, and plants turning out paint and glue. It was a capability machine, spanning everything from refining to finance to R&D
I wouldn't be surprised if all these engineering "capabilities" were driven by Andrews and Harkness.
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I think what we've hit on is that firms founded by Engineers and that do engineering, might be what we need to get the "capability dividend" in our economies.
It would be interesting to do some research into Nigerian firms that fit the above description. Well, software is replete with examples...but focusing more on "real economy" engineering firms.
Great read !
'Where is the talent that cut its teeth inside Dangote Cement and carried that capability out into the wider economy? Where is the Dangote Mafia? Where are the bright young engineers, trained at Dangote Cement, who have gone on to found the cement-adjacent Nigerian firms...'
Could it be that there are none because Nigerian unis suck?
Recall Yale's Prof. Silliman validated the commercial prospects of Edwin Drake's find and thus ensured investment would flow to the emerging crude oil industry. Which Nigerian professor is similarly eminent --- if not globally, then at least continentally.
As you well know, between Asuu and TETFund, our esteemed profs gulp the bulk of our national expenditure on education. If Dangote is the most blessed Nigerian, then professors have to be the most Nigerian civil servants. And in exchange for the billions lavished on their industry, did we even get out of it a measly plant or refinery?
Where do our engineering departments rank globally? Have any of the unis placed their feet down in the pursuit of higher standards?
The Brits, the Yanqs, the Asian Tigers, and China all had top-notch feeder institutions that helped seed their industrialisation by setting standards and feeding talent. Nigeria has none. Perchance, our beloved Alhaji is simply the manifestation of our hidden malaise.
I've come around to treating the Nigerian (and broader Tropical --- tropics lag the temperate region, it's not an 'Africa' thing --- ) question as one schizoprenia or any other malady. The patient is not cursed or at fault. Illness is not evidence of inherent weakness, but of some external or internal disruption that prevents the body — or in this case, Nigeria — from carrying out its normal functions.
I suppose the question that needs answering is whether Alhaji is the fever or Plasimodium Falciparium. My gut says the former, but I'm also searching for any single and willing ladies working at that refinery, so I get small bias o:
It's important not to over essentialist Nigeria. I included a driver on the list for this very reason - big companies are capability machines, or they are supposed to be. Yes, engineers will need an education but nothing beats what you learn inside a firm. That is where the bulk of the education ought to happen. So Dangote as an industrial firm ought to be able to take even raw talent and 'finish' it. This is the point. That's why someone could join Rockefeller as a driver, learn the ropes and go start his own distribution business. He was obviously a very smart guy even when he was a driver but he needed to be finished inside that capability machine.
Interesting macro question. Africa’s industrialization story will likely be shaped by whoever brings long term capital, infrastructure, and manufacturing expertise rather than short term extraction. The biggest opportunity may be in building local value chains, not just exporting raw materials.
The difference between an industrialist and a premier rent-seeker lies entirely in the ecosystem they leave behind.
Feyi hits the nail on the head here. True industrialization isn’t just about the volume of product moved or the height of a billionaire's net worth; it is about systemic capability, talent incubation, and R&D.
Where the historical giants of industry seeded entire generations of spin-off enterprises, engineers, and adjacent technologies, the Dangote model operates in reverse:
- Talent Hoovering vs. Talent Seeding: Importing fully baked expertise from competitors rather than building an internal pipeline of mastery.
- Arbitrage over Innovation: Relying on regulatory capture, protectionism, and buying turn-key foreign technology to extract margins from a captive market, rather than developing proprietary technical depth.
When a dominant player spends zero on R&D, the wider economy doesn't get "industrialized" it gets squeezed. It's a masterclass in ruthless business acumen, but let’s stop confusing market dominance via state backing with genuine economic transformation.