By Vincent ‘Doyin Akinyosoye
Dangote, Amaechi and Fashola spoke at the recent Roundtable with the governor of Central Bank of Nigeria on “Going for Growth in the Nigerian Economy” and their frank contributions lifted my spirit and restored my hope for the future of the country. Their submissions were candid, objective and backed up with statistics presented with a high sense of optimism for the future. I wished the agenda at the “Panel Discussions on Vision for Infrastructure and Finance” had included contributions from the minister for power, to give a glimpse of where we shall be with electricity supply in the years ahead.
Dangote has always fascinated me with his investment strategies which stands him out amongst past and present Nigerian investors. One, he has interest in strategic industries namely, cement, oil and gas, oil refinery, fertilizer, petrochemicals, sugar, salt, food production and processing, and production of condiments such as tomato sauce and puree as well as seasonings and food flavours. My prediction is that by 2030, Dangote will be touching our lives in many ways from the food we eat, the houses we build, the fuel we use to run our machines and vehicles, the fertilizers and agro-chemicals we use on our farms, the plastics we use in our daily lives and the chemicals we use in our factories.
Two, another strategic move by Dangote is that his investments are well spread out geographically and are largely driven by economic considerations as well as by the comparative advantages of the locations of his enterprises. This explains why one can find his investments in the states of Anambra, Kogi, Lagos, Ogun, Kano, Gombe and so on.
Three, Dangote’s unique approach to entrepreneurship plays out in the fact that his investments have a high probability of outliving him, unlike most old entrepreneurs like Da Rocha, Ojukwu, Odutola, Chief Abiola, and contemporary ones like Adenuga and Maduka to mention a few. His companies are majorly quoted on the Stock Exchange. And, his investments are not purely trading concerns that depend on imported goods that drain our foreign exchange, but on productive activities with considerable value-addition properties that contribute significantly to the nation’s GDP, employment opportunities, foreign exchange earnings, and import substitution. This is apart from producing excess manufactured goods for markets outside our international borders, thus providing additional source of foreign exchange besides oil and gas.
Dangote’s investment in cement has made Nigeria a net exporter of the product on which we were spending billions of naira to import before and employing hundreds of workers in Ogun and Kogi states. And, presently, Dangote is building concrete surfaced roads in Kogi and Lagos states, thereby promoting the idea of changing road construction technology from the import-dependent bitumen-surfaced roads to concrete roads.
By 2030, many roads in Nigeria will be free from imported bitumen and our concrete roads will last longer and be maintenance free, thanks to Dangote. Dangote’s oil refinery will be revolutionary in its impact on the economy. The 650,000 barrels a day plant in Lagos, apart from creating thousands of direct and indirect jobs, will supply all the PMS (Petrol), Diesel and Kerosene and Aviation fuel we need in the country and earn foreign exchange from product export. To gain an understanding from this enterprise, the National Bureau of Statistics (NBS) just reported that we imported N3.67 and N2.06 trillion of fuels and lubricants, respectively in 2018 and 2019. With Dangote’s fuel and lubricants, savings on subsidy payments will run into hundreds of billions of naira. The same story goes for Dangote fertilisers, salt, sugar and petrochemicals, products which are presently being imported in large quantities into the country. Therefore, it is safe to say that when all the current investments of Dangote come on stream in the next two to three years, the country’s economy will be better for it.
Amaechi and Fashola, unlike Dangote are politicians and members of the ruling party but all exhibited similar traits of nationalism, patriotism, and hope, in their panel discussions at the Roundtable. Being former governors and currently transportation and works and housing ministers respectively, they displayed the understanding of the roles of functional infrastructure to economic development. Amaechi did not only provide vivid details the construction of the rail line from Lagos to Kano via Ibadan, he laid out the plan for the routing of the track through many economic zones with a bypass to Obajana, to evacuate Dangote cement to the North and Akure to evacuate cocoa beans to Lagos port. He also gave sound economic reasons for the Calabar to Maiduguri rail line as well as the already constructed Itakpe/Ajaokuta to Warri rail line to support the iron and steel complex and link the South-south to the North. He then added the planned coastal rail line from Lagos that will terminate in Benin. The benefits of these lines will be enormous, for example, the rail line from Lagos to Kano will carry more than 30 million tonnes of cargo in a year, making the transaction costs of moving goods between the major agricultural and manufacturing areas and consumption areas low with positive impact on market prices of food and finished products in Nigeria. In addition, our roads will carry less loads, cost less to maintain and last longer, if these projects are carried out as laid out.
On road transportation, road construction is a key economic infrastructure and if properly planned to connects the major hubs of economic activities, like the nervous and blood systems of the human body, will ease the movement of goods and people, reduce the transaction cost of doing business, and moderate the prices of goods and services. As explained by Fashola, all major federal roads linking the major southern port cities of Lagos, Port Harcourt and Calabar to the northern large urban centres of Sokoto, Kano and Maiduguri are presently being re-constructed with a number of East-West road constructions crisscrossing the length and breadth of the country.
On a general note, these two infrastructure ministers have been maverick politicians and public-sector managers in their rights. On several occasions, Amaechi had conducted monitoring rides from Iju train station to Abeokuta and Ibadan on the new rail line, in order to test the veracity of the quality of the coaches and track. This had been very reassuring to Nigerians and a hallmark of a good leader. Amaechi also regularly monitors the Kaduna-Abuja and Warri-Ajaokuta rail lines. Fashola on his own, is constantly crisscrossing the country monitoring federal road constructions and encouraging the contractors.
These three forward-looking individuals, Dangote, Amaechi and Fashola have broken the yoke of traditional bad economic management actions in Nigeria by pursuing with vigour and enthusiasm the right ethos of modern economic development. Their lucid expositions during the roundtable are consistent with the established process of transiting from a primitive economy to a mature and modern one.
A few takeaways emerged from the foregoing analysis. Based on the scenarios painted above, the actions being presently pursued by Dangote, Amaechi and Fashola from my heuristic projections and barring unforeseeable circumstances, by 2030, the Nigerian economy will be at the threshold of maturity and development. Between now and the 2025, growth rate could hover round 5% and then accelerating to 7% between 2026 and 2030. We shall be a net exporter of cement, refined petroleum products, rice, processed food, and textile products. Like cement, the textile industry will be fully reactivated if the massive support from CBN, Bank of Industry, Bank of Agriculture is sustained. These projections are consistent with preliminary results from a current research work by a small group of economists who used an advanced mathematical model to analyse sectoral linkages in the Nigerian economy to project that the activity sectors that have the highest outputs and employment multipliers in the post-ERGP era: Oil Refinery, Construction, Rail Transportation, Construction, Textile and Trade. If our focus on these sectors do not waiver between now and 2030 and good public sector managers come on board, we can start to experience double digit growth rate around 2030 and beyond and solve our unemployment problem, reduce our dependence on imports, and enjoy a strong naira with moderate inflation.
- Professor Akinyosoye is the immediate past Statistician-General of the Federation and CEO of the National Bureau of Statistics (NBS).
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