• How two billionaires turned enemies
To many a billionaire, the miasma of peace seems more suffocating than the bracing air of malice. Ask Aliko Dangote and Abdul Samad Rabiu, they know.
Though a quarrel in the streets is a thing to be hated, the energies displayed in it are fine; the commonest man shows a grace in his quarrel, sometimes. But what if its two noble men drawing their sheathed swords? What if its two competitors barring their aristocratic canines, like recalcitrant cats? As you read, Samad is engaged in a battle of ego and will with Dangote.
In a newspaper advertorial today, Samad Rabiu took Aliko to the cleaners. Hear him “It is disheartening to know that despite all the money that accrued to the government during the oil price boom in recent years, we find ourselves yet again in this position.
To be quite frank, the current FX situation is bad. Even the Manufactures Association of Nigeria and other organized private sector operators have raised alarm over the unfavorable forex situation. There are lots of issues from regulatory to rent-seeking behavior that needs to be dealt with decisively. Whilst the Federal Government is doing everything to protect the Naira, there are Nigerians- Corporates and individuals alike who are grossly undermining the government’s position- sometimes with the help of regulators- knowingly or unknowingly. On one hand, the Central Bank of Nigeria (CBN) claims to be safeguarding the currency in line with the Federal Government’s resolve to protect the naira but on the other hand, the lack of transparent exchange rate policy and inevitable distribution of foreign exchange to all players in the key sectors meant to boost local production only worsens an already bad situation.
Whilst some manufactures are experiencing extreme difficulty sourcing foreign exchange for legitimate business operations within Nigeria, others are getting FX to set up operations in other countries. For instance, last year we opened our ultra-modern Obu cement factory which is by far the most technologically advanced in the country at the moment and are already in the process of doubling our total production capacity across all our cement plants in Nigeria. We have so far expended money raised from our offshore sources to the tune of $300 million for CCNN expansion and our second line at Obu with little or no allocation forthcoming from the Central Bank.
It is rather ironic that a similar competitor in the same industry, who incidentally is the market leader, is allocated huge amount of Nigeria’s hard earned and scarce FX from the official market for its operation in Congo. I do not know if there is an official policy to that effect but I was baffled, as were numerous Nigerians, to learn through a publication of FX allocation returns by First Bank of Nigeria in Thisday Newspaper of Tuesday, February 16, 2016 (page 11) of that allocation whilst other operators in the industry have received far less or nothing at all during the same period for verifiable and viable investments within Nigeria.
It begs the question, “were other plants by that operator across Africa built with Nigeria’s money?” how has that impacted the Country’s economy in return? If this is true, then it needs to be checked as we cannot have a situation where Nigerian industries are been shut down, workers are losing their jobs daily and resources badly needed to develop our economy are being taken out of the county to grow other economies to the detriment of ours. If this transactions was done through a “form A” like the publication suggested, then it is just money that has gone out of the country which can be rerouted into the country for other purposes.
More alarming is the fact that over 50% of Nigeria’s FX allocations through the banks are going to less than 50 companies going by the figures published by the bank on the foreign exchange allocations. Are manufacturers expected to continue developing local industries when some regulators are unwittingly encouraging anti-competition activities by giving unfair advantages to a single operator or are key institutions now in the firm grip of a cabal made up of few who can strong-arm the Central Bank and Federal Government to do their bidding because they have become ‘too powerful’?
I understand that President Buhari directed, through the CBN, that the returns of FX allocations be published periodically despite significant push-backs from vested interest. We now know that he means well.
