Paying Double The World Price: Dangote Cements Nigerians In Poverty
Sept. 26, 2013; Updated 6pm
by Hamza Suleiman with staff
NewsRescue– The going price for a 50kg bag of cement in Nigeria is anywhere between N1,650.00 and N1,800.00. That corresponds to $10-11. At this rate, Nigerians pay at least double the cost of the same size bag of cement in most nations around the world.
Samuel Awoyinfa writing for the Punch this March, captioned this, ‘Cement price still defies laws of demand and supply.’ It does.
In his article, he compared costs to the amount paid for the same product in neighboring Ghana and Benin republic. In Republic of Benin and Ghana, a bag of 50kg of cement sells for 4500CFA (N1,500) and GH¢15.295 (N1,150) respectively. That equals $6 and $9/bag.
But the disparity in price is even much worse when other countries are compared globally. In the United States, this quantity of cement sells between $5 and $6.00
In South African Rands, the bag sells for an equivalent of $6.50.
In Kenya, the 50kg bag of cement sells for 450 Kenyan shillings, that’s about $5.00
We can go on and on. The median price of this raw material is about $5 worldwide.
Nigerians pay double.
One asks why if Nigeria manufactures this product, the price should be double the cost around the world. It is expected that by manufacturing, Nigerians should have an advantage and possibly pay less than the price of the product in other countries, or at least equal.
Cement is a commodity that is almost always manufactured and utilized locally. 97% of cement is manufactured locally around the world from glue and limestone. Hence the difference in rate is not related to importation costs or other such factors.
Gladly though, Nigerians only recently started paying just double after new government regulations. Prior to 2011, Nigerians paid about N2700 for the same 50kg bag of cement. That is three times the global average.
With the rate of constructions developing Nigeria is churning out, one sees that only a single man benefits from this exorbitant price. This is Aliko Dangote. The man who became a billionaire and the world’s 40th richest man courtesy of his monopoly policies in Nigeria.
Dangote manufactures Dangote cement. With his friends in the government, Dangote, Nigeria’s president sponsor, who literally finances and imposes most recent leaders on the nation, benefits from various sole production and importation rights. As Samuel Awoyinfa commented, the demand and supply just does not add up. Without competition in the market, there is frank exploitation bordering on robbery. Stealing from the poor.
Every Nigerian who builds a house pays Dangote and his cronies in the government, almost double for each cement bag. The impact of this in houses not built, built to sub-standards and infrastructure Nigeria fails to have is enormous. DailyTrust Sept. 26, 2013: 2 die as two buildings collapse in Lagos
- Punch: Cement should not cost more than N800 a bag- Ibeto Cement
Sometime in June, 2012, Ibeto Cement had to seek a legal option to retain its import licence when the FG tried to stop it.
The latter’s action was said to be based on advice allegedly offered by local manufacturers (Guess who?). Reacting to this trend, the chairman of New Entrants into Cement Production, Mr. David Iweta, says there is a need for the local manufacturers to review their prices downwards, since there are many variables that work in their favour, which the importers of the commodity do not enjoy.
Iweta sees no reason why a bag of 50kg bag of cement should be sold above N800, since local manufacturers are using lime stones, which are sourced locally, as raw materials. Besides, he notes that labour is available and cheap. He says, “I believe it is exploitation for Nigerians to pay above N800 for a 50kg bag of cement as retail price. Let them reduce it to N700 and see how the commodity will disappear from the market.”
Also, Iweta does not see wisdom in selling imported and locally produced cement at the same price. According to him, an importer pays $100 on cost and freight per metric tonne of cement. He says the locally produced cement should be cheaper than the imported variety because the latter attracts duty and 35 per cent levy, which is another $35 per tonne.
“The local manufacturers do not pay these levies. So, their prices should be cheaper. Imported cement sells within the same price range as the locally-produced ones. This should not be,” Iweta stresses. Read full on Punch
Ibeto Cement berated Dangote Group for being afraid of competition and trying to instigate the federal government to wade in and stop the importation of bulk cement.
It is little surprise that Dangote cement which has now edged itself to control up to 90% of the Nigerian cement market is a whopping 33% of Nigeria’s entire stock market. Literally by monopolizing this industry and by facilitating the limitation and business death of all his competitors, Dangote has been able to raise his stock and his worth on the backs of all Nigerians, to global recognition. Africa’s richest man, thanks to our thousands in cement dollars and our shut-down businesses. Dangote’s huge quarterly profits demonstrate the artificial cost doubling as greed and profiteering and not the cost of doing business in Nigeria.
AllAfrica: Shareholders of Dangote Cement Plc (DCP) are to reap a double for the year ended December 31, 2011, as the company has recommended the payment of cash dividend and bonus issue. [Selling at double reaps double. His exploitative rate is not due to the cost of power generation, etc.]
What is the value of ‘investing locally’ if Nigerians will pay double the imported price? A few jobs?… when millions loose in infrastructure and can not afford houses? It makes no sense. At a time when Nigeria is due for a developmental boom, Nigerians would rather he left the lime stone untapped and saved the local environment the industrial pollution effects of operation and they bought their cement from abroad if necessary at N700($4) /bag as the price should be.
The United States as documented in a wikileaks expose, criticized the Dangote’s oppressive business model in Nigeria. Classifying it as the ‘Beggar-thy-countrymen’ Dangote business model which turns Nigerians into beggars at Dangote’s benefit.
¶1. (C) Summary. Alhaji Aliko Dangote (Dangote) is Nigeria’s most well known businessperson and may be its wealthiest citizen. He has taken on the aura of an economic folk hero for some, villain for others. To supporters, he symbolizes that Nigeria can do more than barter and trade. It can succeed in manufacturing. To detractors, he is a predator using connections in a corrupt political economy to tilt the playing field in his favor and sideline potential competition. The truth resides somewhere between these caricatures. Dangote is counted among President Obasanjo’s inner circle of business advisors. It is no coincidence that many products on Nigeria’s import ban lists are items in which Dangote has major interests.
¶2. (C) Summary Cont’d: Although an undiluted success in terms of wealth accumulation, Dangote personifies the duality in Nigeria’s economy. This duality presents a dilemma for US economic policy. On one hand, Dangote imports significant amounts of US produce and equipment for his manufacturing ventures. On the other, he has had success blocking trade and investment that might compete with his enterprises. Weighing everything in the balance, we believe the Dangote model is harmful to Nigerian and American interests in the long run. Unfortunately, the Dangote model will likely be the one most emulated until its beggar-thy-countrymen contradictions become more apparent. End summary.
The same wikileaks report described how Dangote literally financed the campaign and bought the presidency of dying Yar’Adua and in effect made Jonathan the president of Nigeria.
By sponsoring Nigeria’s gubernatorial and presidential candidates, Dangote ensures that his interests are protected to the detriment of his competition, smaller businesses and the Nigerian populace in general who can end up paying double for each bag of cement.
It is no surprise and coincidence that as Boko Haram terrorists killed, bombed and destroyed the country, Aliko aka Beggar-thy-countrymen Dangote remarked that Boko Haram was not Nigeria’s worst evil, but the lack of infrastructure was the issue. Reconstructions of all bombed buildings, over 800 schools in Borno will be carried out with which exorbitantly priced cement?
Nigerians are quick to admire and respect whoever is wealthy. Many Nigerians sing Dangote’s praise, not realizing that he represents the ultimate cabal that fixes his puppet leaders and ensures the country remains with the most corrupt leadership who safe-guard the interests of the tycoons who can literally kill their competition.
It is recalled that when Michael Otedola ranked also as a billionaire in a top world wealth list, Aliko aka Beggar-thy-countrymen Dangote was alleged to have intentionally crashed the value of Otedola’s business, simply to diminish his competition.
Duel of the Oligarchs,Otedola Vs Dangote & the winner is….. In February last year, the SEC had accused Otedola and AP of price manipulation, but took no concrete action against him. A recent report by Forbes, which only a few weeks back rated Otedola as the second Nigerian, behind Dangote, on its world billionaires’ list, stated: “Nigeria’s only other billionaire when we published our ranks in March, worth $1.2 billion. His fortune is now down to approximately $500 million,” in reference to Otedola.
Some people believe in rising and allowing others the space to rise, the limitless sky being broad enough to take us all, while others believe in squashing everyone else and rising on their heads then giving them alms and peanuts. This is the known Dangote model.
People celebrate when this billionaire donates as he is doing now; he is engaged currently in the disbursement of $60 million in spurious grants to ’empower’ women. Dangote publicly announced this ‘charity’, in so-called grants to empower women. $60.00 per woman. Everyone knows that $60 does not empower, but rather merely buys 3 meals and then turns people to fans and dignified beggars.
What people do not realize is that when the wealthy give these charitable donations, they do so for tax breaks, to evade paying taxes. By doing so they get two benefits for the price of one. They get fame and publicity and get government tax write-offs to the value of the amount donated.
This is why companies like Nigerian Breweries are seen sponsoring shows and occasions all over Nigeria, year in, year out. These shows are the way this company which makes billions in profits sheds off its tax burden. Dangote’s publicized grants are pretty much the same thing.
Nigeria’s cabal like Dangote steal $10,000 from each woman via their government enforced monopolies, then give back $61.00.
For what Aliko Beggar-thy-countrymen Dangote has stolen from Nigeria, the rights and resource Nigerians have lost, carved up and handed to Dangote by Obasanjo and Jonathan, both of whom he paid for their presidential victories; Dangote should return not to his companies and by giving peanuts to the people, but by real social empowerment. Free infrastructure, road access for the farmers to convey their goods. Free developmental, educational and research institutions. Acquiring land and giving this free to farmers. Providing supported irrigation, security, technology, transportation, etc. These are real contributions, that if Dangote did on any serious level, broadly, Nigerians will be able to say that at least he gave back one tenth of what he stole from them.
- How Obasanjo and Dangote Got Nigeria “Here” by Imposing Terminally Sick Yar’Adua- US Intel. Leaks from “Rat” Gusau
Former NSA of Nigeria, Aliyu Gusau complained to the US ambassador, that Obasanjo and Dangote were willing to put a dying, already suffering from black-outs, epileptic and unable to govern Yar’Adua into power, so as to destroy the country.
When Yar’Adua objected, telling Obasanjo that he was too sick to run Nigeria, Obasanjo allegedly told him that ‘God will cure you.’
When Yar’Adua complained that he had no money, Dangote and Transcorp came in to finance the dying man’s campaign, with Jonathan ready beside to assume office if and in the event that he passed.
- Wikileaks: Aliyu Mohammed Gusau said that Dangote and the other “Transcorp boys” seek a Yar’Adua presidency to facilitate their gaining control over most of Nigeria’s oil and gas production
¶4. (S) Aliyu Mohammed, saying he was quoting Yar’Adua directly, said that Obasanjo had “ordered” the Katsina governor to contest for the Presidency. When Yar’Adua objected that the state of his health precluded it, Obasanjo countered that “God will cure you,” and undertook to cover all medical expenses. When Yar’Adua said he had no money, Obasanjo organized financial angels, all associated with Transcorp and led by Northern millionaire Alhaji Aliko Dangote. This group is supplying the Yar’Adua campaign with 45 jeeps (of which four are armored), a war chest of 5 billion naira, and a rented jet. (Aliyu Mohammed said that Dangote and the other “Transcorp boys” seek a Yar’Adua presidency to facilitate their gaining control over most of Nigeria’s oil and gas production.) Andy Uba, recently selected as PDP gubernatorial candidate for Anambra state, has been a “special assistant” to President Obasanjo; he has no independent power base of his own, and is widely disliked because of his arrogance. Aliyu Mohammed went on to say that the President had ordered the arrest of the chief of staff to Rivers State Governor Peter Odili to warn the latter away from seeking the vice presidential nomination himself.
Many cherish Dangote for providing over ‘50,000’ jobs to Nigerians (his staff, but better called ‘slaves’ who run his industries as machines can’t yet), they compare him to others who are certainly not as rich, but appear to do less than him. It is a slavery and worship of money as greatness mentality that some Nigerian have. This is why the late MKO Abiola overwhelmingly won the annulled June 12 elections, despite the popular belief that he robbed Nigeria blind with the ITT schemes, that in his memoirs, he himself admitted the program was far from perfect.
People do not understand that a thief is a thief, whether he wears a suit and drives a fancy car or walks and wears a hood. And a thief potentially kills. Excessive greed and profiteering is wicked, bordering on criminal. It is really sad to have to lay it bare about the worlds richest African this way. Africans possibly should rather than dignify a man whose state has over 1.5 million beggars, remember and cherish their ancient worlds richest man in history, dignified King Mansa Musa of the Malian empire which included north Nigeria.
People simply believe that wealth is greatness in Nigeria, regardless of how it is amassed, even if the wealth given to you as salary or grant-charity is your money from the double cost you paid to build your house and from the business you were forced to shut down due to these cabal and their puppet rulers’ economic and national monopolistic policies. Abdul Basit, Yesterday put it this way: “The Dangote issue is like one of a person who seizes your river and then feeds you fish. Do you praise such a person? He has taken your means of self sufficiency through corrupt and unethical business practices.” He further stated, “Dangote’s empire destroys competition. If he were in a country with actual laws, he would be sued for anti competitive practices. However, in our gorilla republic, he owns the government.”
To make situations worse and add insults to the beggars Dangote makes of Nigerians, it is widely understood that Dangote highers staff–more like slaves–PhD holders to drive his trucks. Thus devaluing the Nigerian education system. Bachelor holders are likely hired to be his cleaners. It is not surprising that there is a popular slang, that ‘dog is more loved in Kano than Dangote.’
And to protect the image he gets in the press, you will see his sponsored ads on almost all Nigerian newspapers and popular blogs. Look out for the emblem that lets you know Aliko beggar-thy-countrymen Dangote runs what you read:
Dangote for president, right?