July 16, 2014
The recent behavior of the Standards Organisation of Nigeria (SON) and the House of Representatives over the brouhaha arising out of the so-called standardization of cement in Nigeria shows how a few persons in the private sector and government agencies are in an incestuous relationship against the interests and future of the Nigerian people.
Dangote Cement Plant
Hardly had Dangote Cement announced that it had joined Lafarge company in producing the 42.5 cement grade in Nigeria when SON issued a statement claiming that the traditional 32.5 grade used over the decades is appropriate for only plastering in buildings. Put succinctly, SON was saying in effect that only the 42.5 grade is good for building houses ; it was also arguing that the 32.5 grade is responsible for the spate of building collapses which our nation has witnessed in recent times.
The SON statement, as to be expected, did not cite any authority or incident or study to validate its claim. Not to be left out in this comedy of errors, the House of Representatives adopted the report of its ad hoc committee on the composition and pigmentation of cement which will for long continue to embarrass the integrity of this legislature. All relevant regulatory bodies like the Council for the Regulation of Engineering in Nigeria(COREN) and professional organizations and associations like the Nigerian Society of Engineers, Nigerian Institute of Building, Cement Manufacturers Association of Nigeria and Nigerian Institute of Architects—all represented by their respective presidents– testified before the committee that all cement used in Nigeria since 1952 is approved by SON and meets every standard. They rightly argued that no ugly incident has been traced to cement which is used in the building and construction industry together with sand and granite to produce mortars and other things. Indeed, various studies have shown that building collapses are caused by inferior materials, refusal to use qualified professionals, weak regulation framework, bribery and corruption, etc.
The truth is that SON and the House of Representatives want to hold the Nigerian cow for Dangote cement to milk. The casualties are the Nigerian people, especially the masses. Immediately these two government institutions went to town with their voodoo standardization statement meant to de-market the other seven cement producing companies, cement prices hit the rooftop. Scarcity became the order of the day. A 50kg cement bag overnight shot up from 1,600 naira to N2,400. Not surprising. Dangote alone controls 60% of the market, so it could be called the market maker. It was the renewed injection of the product into the market by other companies that caused the prices to start climbing down.
How could a number of people ever hope to own or even rent houses in this situation? Mark you, cement has a more prominent place in the Nigerian building industry than in most other countries. In the United kingdom, for example, burnt bricks are widely used. In the United States, prefabricated materials are used extensively. The result is that builders in these two nations use less cement than our people. Why do Nigerian government officials want to leave the people at the mercy of oligopolies? About two years ago, President Goodluck Jonathan publicly announced that he would plead with Dangote Cement top officials to bring down cement prices in the interest of the people. What has happened since then? Haven’t prices been sky-bound?
Our politico-economic system is worse than the incestuous relationship between private and public sectors in Asia which in July 1997, led to the near total collapse of the economies of Indonesia, Thailand, etc. The Southeast Asians were practising the corrupt brand of capitalism known as cronyism. In Indonesia, for instance, the Suharto government was using a few private sector operators to amass wealth, designing policies to suit their private commercial interests. According to the legendary founding Prime Minister of Singapore, Lee Kuan Yew, in From Third World To First: The Story of Singapore from 1965, the Suharto family stole $40b, though the value crashed to only $4b in the wake of the cataclysmic Asian economic crisis.
Public policy should benefit the people, and not a handful of individuals influencing government officials in the most unconscionable manner. This is all the more so when the individuals are allergic to competition because they cherish monopoly. When Ibeto Cement was becoming the dominant brand in the Eastern Nigerian market, the Olusegun Obasanjo government woke up one morning and went after Ibeto Cement Company in an all-out war, leveling all manner of economic crimes against it. The entire Ibeto Group, based in Nnewi, Anambra State, was getting fully paralysed until the newly inaugurated Umaru Yar’Adua administration came to its rescue after discovering that the charges against it were preposterous and designed to create a cement monopoly for a close friend of Obasanjo’s. Well, one is not sure if Obasanjo still regards this fellow as a friend. The former president has since realized that most of the people milling around him when he was in public office have long distanced themselves from him. His Bells University at Otta in his native Ogun State looks like a glorified secondary school because it is littered with abandoned projects; his wealthy fair feather friends who pledged to donate generously to the university which he established when he was the president have refused to redeem the pledges.
The Ibeto experience reveals the hypocrisy of the Nigerian elite and the artificiality of the religious, regional and ethnic cleavages in Nigeria. The man who was hell bent on destroying Chief Cletus Ibeto’s businesses using the instrumentality of the state is a Christian and southerner, like Ibeto. The destroyer was acting at the behest of a northern Muslim businessman. The man who rescued Ibeto was the late President Yar’Adua, a Muslim from the northern state of Katsina. Frankly, the Nigerian political and economic elite is a very paradoxical species of humanity. I pity those who allow themselves to be used, manipulated and dumped at will by these immoral elites.
It is becoming increasingly difficult to dismiss the allegation that the Dangote Group hates competition with a passion. For this group, it is always monopoly all the way or nothing. The moment Dangote pasta appeared on the scene, a dangerous rumour spread rapidly like a bushfire in the harmattan against Indomie noodles, the favourite processed food of most kids in the country. It was alleged that the Indomie factory was contaminated with an extremely powerful insecticide. The National Agency for Food and Drug Administration and Control (NAFDAC) under the leadership of the indefatigable Professor Dora Akunyili promptly shut down the factory and withdrew all Indomie products from the market, only to realize in May 2004, that the rumour was a marketing ruse. Earlier, all those who had ventured into sugar business, considered the exclusive turf of the Dangote Group, had their fingers burnt. Examples include Dr Stanley Macebuh, founding managing director of The Guardian newspapers, and Dr Yemi Ogunbiyi, another Guardian executive, who obtained a huge facility from Alpha Merchant Bank to import sugar, only for sugar prices to collapse overnight in Nigeria. Dr Macebuh almost got jailed by the Failed Banks Tribunal headed by Justice Amina Augie in the 1990s.
What Dangote Cement desperately wants with its new gambit over cement standardization is to shut down the seven other cement companies in the country, including the Cement Company of Northern Nigeria based in Sokoto and Ashaka Cement in Gombe State. SON and the House of Representatives leadership are mere pawns. This trick just can’t work. Nigerians are no fools.
Abdulhamid is a consultant with Cement Company of Northern Nigeria, Sokoto State.