I wrote on this wall about two years ago to praise the business ingenuity and nationalist economic instinct of Aliko Dangote. The recent revelations of how the Dangote Group has enjoyed privileged, almost exclusive access to government-subsidized foreign exchange to the tune of hundreds of millions of dollars and the perspicacious analysis of this crony capitalist access by Bamidele Ademola-Olateju have compelled me to take a second look at the Afrocapitalism of Dangote–to reexamine my previous enthusiastic endorsement of the Dangote business methodology.
There is no sugar-coating it: Dangote is the poster child for patrimonial monopoly capitalism in Nigeria. Whether you favor or oppose a capitalist trajectory for Nigeria and Africa, this kind of capitalism cannot get your approval. It is morally, economically, and legally wrong. It distorts our financial and economic terrain. More devastatingly, it amounts to a huge transfer of public wealth to a favored businessman. It is an insidious form of corruption.
Dangote gets unfettered, guaranteed access to dollars, any amount of dollars he claims to need to finance the importation of industrial inputs or the expansion of his operations, at the official exchange rate from the CBN. The Nigerian people basically sell him our oil revenue dollars at the heavily subsidized rate of 199 Naira, taking a loss of at least 100 Naira for every dollar we sell to him. It is undeserved instant profit at the expense of Nigeria. To compound this, other businessmen with equally legitimate business needs do not enjoy this guaranteed forex access.
This, frankly, puts me in a dilemma. I am still in love with several aspects of the Dangote business paradigm. All his investments are in Nigeria and Africa, a pan-Nigerian, pan-African investment strategy that I fully endorse. His businesses continue to employ thousands of Nigerians, easing Nigeria’s unemployment crisis and helping to reduce the so-called youth bulge.
Dangote continues his national pattern of investing. Today there is no zone of the country without Dangote’s investment. What’s more, Mr. Dangote is on the verge of solving Nigeria’s perennial fuel shortage with his refinery, a project that when fully operational will render moot the debate on the price and supply of petroleum products as well as the debate on the corrupt, inefficient institution called NNPC.
A complex situation calls for a complex analysis and conclusion. I continue to believe that if some members of Nigeria’s monied class had emulated Dangote’s methodology, warts and all, Nigeria would be in much better shape today and our future would be much brighter.
In this sense, then, Dangote, for all his complicity in Nigeria’s crony monopoly capitalism, and for all his unearned privileges and subsidies financed by the commonwealth, is still a more tolerable model than the alternatives. These alternatives include mindless political stealing; stealing and hiding loots in foreign banks; unimaginative investing; investing with no multiplier effects or capacity to solve pressing national problems; and investing in provincial, isolated markets. Dangote for me remains an imperfect economic nationalist.
That does not mean that he should continue to enjoy a forex largesse financed by us. That should stop right away. But it means that he points to the possibility that one can pursue both personal profits and nationalist economic aims at the same time. The two impulses can coexist, and Dangote, whether that’s his intention or not, embodies that duality.