Tuesday, January 15, 2008

It appears Yardy is trying to convince Nigerians that he has their interests at heart. He is now reversing Obasanjo's ban on cement importation. According to Nigeria's Punch newspaper, Yardy approved the mass importation of cement into the country. Apparently, the Minister of Commerce and Industry, Charles Ugwu, presented Yardy proposed the idea because the nation is experiencing a deficit of 13000 tonnes of cement necessary for various works. Ugwu said,

"we established that there is a shortfall with regards to supply and requested President Yar’Adua to approve, in accordance with the cement policy, the importation of the differential between demand and the established local production capacity.”
He also went on to stress that this act was for the benefit of the Nigerian people.

For those that can remember, former President Obasanjo instituted a ban on cement importation in the hopes of boosting domestic cement manufacturing industry. This ban led to an increase in prices for cement during a construction boom. And in a nation where people prefer building their own homes to renting or other forms of home ownership, the price increase caused scarcity and a slow down in construction for individuals and companies.

However, it is alleged that Obasanjo's ban on importation had little to do with protecting Nigeria's cement manufacturing industry as much as it had to do with protecting the financial interests of himself and the Big Boys. Nigeria's premiere producer of cement is Dangote who, due to Obasanjo's ban, controlled access to and prices of cement. There are also rumors that Dangote, through Obasanjo, kept out a potential domestic competitor whose factory is now sitting idle.

Considering this information, one would assume that Yardy's lifting of the cement importation ban is clearly a means to benefit ordinary Nigerian citizens. That may be true. However, a very astute commenter on this blog once noted that it is very easy to reverse decisions made by formers rulers. I must say that I agree with that sentiment. This is not the first OBJ policy that Yardy has overturned, but this issue was likely placed before his desk in September and so it seemingly took a long time for this decision to be announced. I can't help but wonder if OBJ's connections to Dangote and Obajana Cement PLC has anything to do with the delay in helping the average citizen on this matter. In fact, just for education sake, let us all be aware that Obajana Cement PLC has received $75 million from the World bank, and is backed by Finland's Finnfund, Germany's DEG, Sweden's Sweedfund, Netherland's FMO, and the European Investment Bank.

My point
This is simply the product of my overcreative, conspiracy loving mind, but wouldn't it be interesting to discover the following. OBJ and friends enjoyed a monopoly on the Nigerian cement industry but they knew that those days could come to an end with subsequently elected administrations. Thus, to make as much money as possible within a potentially short time frame, OBJ instituted a ban on cement importation. During that time, the Big Boys created Obajana (a Dangote owned company) and aligned it with as many foreign investors as possible to lower the possibility of its dissolution by any future regimes and ensure complete dominance of the cement industry.

Assuming that there is any truth to my thinking, overturning OBJ's ban on cement helps the Nigerian public by providing access to cement, but the act will definitely help Obajana Cement PLC and as such continue to fill the pockets of the Big Boys. As they say, "the rich get richer..."and in this case, they are all making money off the construction and cement industry.


UPDATE (6/28): Nigeria's Federal Government has given permission/license to 6 domestic cement manufacturers to import cement in an effort to drop the price of cement from N2000 per bag to N1,150 within 3 weeks.

Related Article of Interest:
- Being Cynical About Cement, Nigeria & The IFC

22 Curiosities. Add Yours.:

rethots said...

With a hand over my face {'cos that is my industry (construction)} can't say much about this. However, i seem to lean towards your thots.
I feel i'm gonna like Yardy but, his seemingly silence isn't golden anymore. Afterall, you can feel a person (blogger) through his comments (on other people's blogs) but, can comprehend his essence much better through his own writings (blog). All his (government's) reversing of policies does not show what he (government) has for the nation. Eventually, it doesn't really matter what he has (good or bad, the people's opinions anyway) -let him just speak.

guerreiranigeriana said...

interesting...i like your conspiracy mind:)...i need to convert mine from us politics to naija politics...are you giving lessons?...

stuck in my throat o said...

Well done with the good work you are doing.
During my service year, I noticed a company on the Lagos-Abeokuta Express called Gilmore. I had to stop there and i was told it was OBJ's. He makes packaging for most of Dangote's products.
I served in Bells University which OBJ denied ownership of.The man is full of so much S*#T.

Ms. emmotions said...

hmmmmm, i agree wit u completely in this conspiracy regards, hmmmmm, personally, i dont see anything wrong wit encouraging export and local production of some goods, but if the price of locally manufactured goods in this case cement now cost more than when it was mostly imported, then there is a problem.
considering the inflated price of cement wen importation was ban, i cant but agree that somewhere, somehow, the big boiz had something to gain from it all.

weldone dear friend !!!


@ ms. emmotions: what???? ms. emmotions agrees with something I wrote? Thank the stars! I must have done something wonderful in a former life to have such a lucky day! lol!

@ simt: ah, this is why I love blogging, it affords the opportunity to share info and insight. Thank you for adding your knowledge to the mix.

The ties that bind Dangote and OBJ are absolutely clear. The issue becomes unjust enrichment and the possibilities of such happening during his administration. Well, let me not get too far ahead of myself. I'll leave that to you readers to read between the lines and make the necessary connections....

@ Guerreiranigeriana: thanks for the compliment! Make sure you search through the blog for other zany conspiracies. They are sure to blow your mind or at the least be intriguing. As for lessons...I always enjoy helping readers fill in the gaps when it comes to Nigerian politics and other issues. If I can be of help, be sure to let me know...

@ rethots: Yes, Yardy's silence on issues is disturbing. But, in his defense Nigerian politics and allegiances are convoluted. I don't think the modern mind can truly grasp it. So many of us live in a computer age where everything appears binary. While Nigerian wahala is far from binary in nature.

I truly think his hands are tied, based on the way he came into politics, but I also truly believe that he runs the shots at the same time. And, of course, Nigerian rulers have never considered the masses an intelligent lot to be respected and feared. So, like others, Yardy just follows the same rules of not engaging the public.

Oh well, my thoughts are beginning to move quicker than my typing abilities, so it is time to stop. Thanks for moving the conversation along.


Ok, so now do you honestly expect us to give kudos to Yardua for lifting the ban on the importation of cement because he gave out contracts to his cronies to start importing cement...yeah, there goes another conspiracy theory; which I believe is borderline truth!
I wonder when Yardua started thinking 'bout the suffering of Nigerians in effecting change...all Yardua's accomplishment has been undoing OBJ's corrupt legacies, which inturn breeds more corruption; the poor nigerian masses are just caught in the middle, while this hogwash Yardua govt and his benefactors smile to the bank with their loot!

For the love of me said...

My simple mind cannot comprehend why rich people steal, OBJ, yardy, Dangote, dont they just have enough money already? Those Obj bans were pure madness, like a friend of mine always says you dont need to ban importation of sausage rolls for gala to succeed.UAC identified a place for gala, let other manufacturers simply do so. If they could have,they would probably have banned chivita so Dansa could succeed. Isn't it strange that even with the ban on fabrics, almost all local fabric manufacturers have closed shop at a time that wearing ankara is hip in Nigeria. Now the govt is giving them a loan to restart business. As for Yardy, I do not think anything good will come from him. Forgive my negativity but take a trip to Katsina and see for your self if he made any substantial difference in 8 years. History simply repeats itself.

Jinta said...

all the rumours and conspiracy theories will not prepare us for the reality of the corruption going on, if, one day, the lid is lifted on the hidden things

imnakoya said...

We are all conspiracy theorists, however; I find no reason why the issue of cement importation should raise the thought.

Does Dangote enjoy an undue government assistance to engage in cement processing or importation? This can be argued either way, and I can understand why it may "appear" he does given his connection to Aso Rock, but is this the case? I don't think so.

Dangote might have been unduly aided by his political ties to power, but the issue of Obajana cement is one that is nothing more than a sharp business idea that is been cleverly executed.

What I think should be examined is the tendency of the Nigerian government to make good-intentioned decisions based on faulty reasoning. And there is only one word for such act: Stupid!

Banning foreign importation of cement will work when the local industries are WELL geared to compete FAVORABLY with foreign markets and can meet demand. As long as there is a positive price/cost differential to import goods, people will do all humanly possible to import even if it means smuggling.

Obajana Cement is a novel concept among private business initiatives; that the IFC (word bank) deems it fit and co-finance it speaks volumes to relevance of the project. This is not a case of the "Aso Rock connected-big boys" versus the masses...far from it.

guerreiranigeriana said...

whoa!...nigeria politricks just blew me away with that one...chai...naija...

TheAfroBeat said...

Your theory sounds plausible.

I'm surprised that you're surprised at Yardy's silence...abi, what else did you expect ;)?


@ imnakoya: thanks for stopping by and adding to the conversation. Of course, the wonderful thing about conspiracies are that they are simply opinions and not fact. However, you don't need to be a conspiracy theorist to see that something might be a little fishy with the Obajana project.

That being said, I am sure that the Obajana project could be a 'novel concept'. However, simply having the world bank's stamp on a project speaks nothing about its actual relevance. WSJ recently stated, “Corruption is an endemic problem in bank projects, swallowing unknown but significant chunks from its $30 billion-plus annual portfolio. No less a problem has been the bank staff’s ferocious resistance to anything that might stand in the way of its lending ever more money to projects run by the same governments that tolerate this malfeasance.”

Most people know that organizations like IMF and WB are just as corrupt as some of the governments that we constantly criticize. Besides, Nuhu Ribadu's counterpart at the World Bank was just chased out of his position. He quit yesterday, Wednesday.

Anyway, like you said, it is possible that nothing illicit happened in the creation of Obajana, but we can still ask the question about whether or not Yardy's move was really for the benefit of ordinary citizens or for the Big Boys. Or both. Thanks for spurring the conversation, nonetheless.

Kiibaati said...

Like most 9jerians, I am cynical. But I am learning to change. I think banning was necessary to provide an incentive for investors and the unbanning was necessary to eliminate the persistent shortage.If you look back, you will see we have followed this route for many other products because banning doesn't seem to encourage action on the part of investors.

Kiibaati said...

Like most 9jerians, I am cynical. But I am learning to change. I think banning was necessary to provide an incentive for investors and the unbanning was necessary to eliminate the persistent shortage.If you look back, you will see we have followed this route for many other products because banning doesn't seem to encourage action on the part of investors.


"...that the IFC (word bank) deems it fit and co-finance it speaks volumes to relevance of the project"

Thanks for your swift response to Imnakoya...the IFC (World Bank)and IMF stamps of approval are as worthless as tissue papers.

I'm appalled that someone would actually cite these world financial organisations as relevant agents of change in Africa; they are joined in the hips with corrupt African govts in executing fraudulent and abandoned projects!

imnakoya said...

Okay, it's time to throw down the gauntlet. A quick Google search for the differences b/w IFC and World Bank would have taken care of the confusion...we need to get our facts straight!

IFC is a component of the world bank, but legally and financially independent of it, and all it does is fund of business ventures in emerging economies.

IFC "provides loans, equity, structured finance and risk management products, and advisory services to build the private sector in developing countries...", nothing more. It doesn't engage in economic policy formulation like the IMF or world Bank proper.

Now that the differences are clear; I need to state clearly that I'm not a fan of the IMF or World Bank, particularly the former.

Funding is a major hinderance in economies like Nigeria's so if Obanaja/Dangote could convince IFC to drop some cold cash, we need to applaud them and not be appalled, and others need to study how the Obajana Team got it's acts together - this is hardly the time for cynicism, because it just does not get anything done. Simple!

On Obajana Cement:
The project will have a combined production capacity of 4.4 million metric tonnes per annum (mtpa) and includes a 135 MW captive gas power plant; a 94 km gas pipeline; a limestone quarry with associated 7.5 km conveyor belt; a 13m high dam impounding a reservoir with a total storage capacity of 5.1 million m3 and a 328 unit housing complex for non-local staff... blah blah blah.

I need to add that the gas plant has an excess capacity which the owners hope to sell to the neighboring community. Do we have electrical power problem in Nigeria?

When was the last time we had such a mega capital-intensive job-generating, well-planned private-sector initiated venture in Nigeria?

This is the first of it's kind! Too bad it's coming from Dangote...but should we be appalled and cynical?

Waffarian said...

@Imnakoya: The answer to that question is yes, we should be cynical. We do not have the luxury not to be, in that country. True, there are many "issues" (economical, IMF, IFC, etc) that we might not understand, but considering the rate at which things are banned and then overturned, I think we should be curious about what is happening.

I do not trust either of them, obj or Yardy, and untill proven that these decisions have helped the naija public in any way, they are both under suspicion.

TheAfroBeat said...

I think it's important to be alert/watchful (for some of us that means cynical, for others, optimistic) of our government's decisions in "our" best interest. Even though the IFC has a great track record, I agree with Waffarian about holding out on the verdict: until we see the fruits of this "mega capital-intensive job-generating, well-planned private-sector initiated venture", we should keep our eyes peeled!

imnakoya said...

Keeping our eyes peeled, no doubt!. Our activities online are fueled by a strong desire to see a positive turn-around, however; I doubt if a cynical mind will be primed to see, seek, or seize opportunities that could bring about those changes we so desire.

I have come to cultivate an outlook of cautious optimism; call it 'seeing a half full cup', at least it prevents me from banging my head against the wall...

Yar'Adua appears confused and most probably can't find his navigational charts, and Obasanjo created a mess that trails after him months after leaving office.

The only good news coming out of Nigeria at at the moment is through the courts - cleaning up the mess of Obasanjo, PDP and INEC. The other is through the private sector of the economy, and Dangote is a prime player in this field and Nigeria needs more entrepreneurs like him. People that have the might to build businesses that can improve lives and infrastructure - things we rant about everyday.

miss hotbody said...

why do people use words like confused for yardy? that man knows what he is doing oh. I am not one to underestimate him.

Ms. emmotions said...

lolllllllllll, lmao !!!!

common, am not always disagreeing wit u , lol, dont worry am sure we wil can always reach a comprise on my opinions, just that i like being very original in my tots, no harm meant, believe me....lol

let me go see the latest, who knows may disagree wit u completely ...na wa o

snazzy said...

I read the article that you used as your source, and the government spokesman says in there that the government will grant importation licenses to producers. The fact that it was announced in the papers in january is an indictment of the papers and not Yar 'Adua. I just want them to open the entire market.

On the Dangote issue, i do not like the way he does business. However I do like the fact that he faced manufacturing as oppposed to the services and trading that most Nigerian businesses engage in.

On banning products, it's stupid but the Manufactures Association of Nigeria has decided that it is the only way for them to survive until the government fixes the infrastructure. After all with the high cost of manufacturing in Nigeria they cannot compete. So it's not just Dangote that is pushing for bans. Chivita and Coca-Cola made a killing in the fruit juice industry after the ban, and Dangote finally got in on the act as he has never seen a mass market that he didn't like (also see his entry into telecoms)