Leading businessman and Chairman of Aliko Dangote Foundation, Alhaji Aliko
\nDangote has challenged the government to muster the will to provide
\ncritical infrastructure that will make the nation\u2019s environment conducive
\nto commerce and industry.<\/p>\n
Dangote made this appeal while delivering the third Eminent Persons
\nBusiness lecture and inauguration of the Aliko Dangote Complex, a N300
\nmillion naira ultra-modern building donated to the University of Ibadan,
\nSchool of Business, at the Ajibode University extension, Ibadan.<\/p>\n
He said his foundation will continue to prioritize education as a means of
\nraising entrepreneurs that will change the face of the nation\u2019s economy
\nand lead to real growth and development.<\/p>\n
He told his audience comprising of academia, students, royal fathers and
\nbusinessmen that Nigeria has got the potential s to be among the most
\nindustrialized countries in the world and required only the right policies
\nto propel the investors into taking the lead in industrialization efforts.<\/p>\n
Delivering his paper titled \u201cIndustrialization – Backward Integration as a
\nstrategy for National Development: The Story of the Dangote Group\u201d,
\nDangote whose lecture was delivered by Engr. Ahmed Mansur, the Group
\nExecutive Director of the Dangote Industries Limited, stated that for the
\nnation to breakthrough industrially, the leadership and the people must
\nhave the political will, the courage and perseverance to succeed.<\/p>\n
Dangote was of the opinion that backward integration is one of the fine
\npolicies of the government that has helped Nigeria\u2019s economy and that he
\nhad led in this regard as a private sector operator, advising that the
\npolicy could be replicated in other sectors of the economy.<\/p>\n
Highlighting the advantages of the backward integration, the business
\nmogul stated that there would be increased control and efficiency as
\ncompanies are better able to control quality and coordinate the delivery
\nof raw materials or other supplies.
\nAccording to him, this level of control allows companies to increase their
\nsupply chain efficiency. Stock outs and over-stocking are better avoided,
\nraw material supply is better managed, and delivery schedules can be
\nbetter guaranteed.<\/p>\n
He pointed out that going by his own experience as leading cement producer
\nusing backward integration, there will be cost control as costs can be
\nbetter managed all along the production process.<\/p>\n
Citing instances of countries that have used backward integration to climb
\nthe industrial ladder key sectors, Dangote said \u201cSeveral countries have
\ninvolved backward integration in some of their industries. Examples
\ninclude Brazil, Ghana, Malaysia, Norway, and Russia. China and the United
\nStates of America probably have the most vertically integrated firms given
\ntheir size and industrialization focus. This typically start with local
\ncontent requirements for extractive industries and then includes
\nconsolidation across product value chains.<\/p>\n
\u201cNorway successfully managed the transition from a country with no direct
\ncapabilities in the oil and gas sector on the discovery of oil in the late
\n1960s to become a competitive producer of a variety of oil field services
\nand equipment. Today, more than half of the capital inputs used in the
\nsector are sourced locally, along with 80% of the sector\u2019s operational and
\nmaintenance inputs..<\/p>\n
\u201cSimilarly, oil and gas firms operating in Brazil were awarded more points
\nwhen tendering for contracts if they demonstrated commitment to purchasing
\nhigher shares of goods and services from local Brazilian suppliers.<\/p>\n
Specific local content targets were set for onshore projects (70%) and
\noffshore projects in shallow (51%) or deep (37%) water.\u201d<\/p>\n
For Nigeria, Dangote stated that using backward integration was not just
\nfull of bed of roses as Nigerian businesses face major challenges in
\ndeveloping backward integration.<\/p>\n
These according to him include difficulties in obtaining adequate and
\nreliable energy and power supply; lengthy, costly and politically
\nsensitive processes of gaining access to land; poor-quality transportation
\ninfrastructure; the high cost of capital; long lead times before backward
\nintegration efforts yield rewards; sensitivity to external shocks and
\nunforeseen costs;<\/p>\n
\u201cInconsistency of policy implementation; lack of inter-sectoral policy
\ncoordination; inadequacy of knowledge and skills in the workforce; and
\nlack of foreign exchange. Most of these challenges relate to the poor
\nquality of the overall business enabling environment, rather than due to
\nlocal content policies.\u201d<\/p>\n
Nevertheless, he argued that the policy had helped Nigeria in the cement
\nsector pointing out that as at 2002 before the backward integration policy
\n\u201clocal installed cement production capacity was about 3 million metric
\ntons per annum (while actual production was under 2 million metric tons).
\nCement demand was approximately 9 million metric tonnes per annum and the
\nsupply gap was filled by cement imports. Imported cement accounted for
\nover 70% of local cement consumption.<\/p>\n
\u201cConservative estimates of the cement import bill as at 2002 placed it at
\nbetween US$500 – US$600 million annually. More importantly, it essentially
\nexported jobs to other countries and exposed the national economy to risk.
\nNigeria was one of the largest importers of cement in the world despite
\nits huge limestone deposits. To build the nation\u2019s capacity in the cement
\nsector.\u201d<\/p>\n
However, with government introducing the policy in 2002. \u201cIt restricted
\ncement imports into Nigeria while the issuance of cement import licenses
\nwere tied to investments in local cement production capacity with strict
\nmonitoring to ensure compliance. Sector specific incentives for the cement
\nindustry, in addition to other more general incentives e.g. tax holidays,
\ncapital allowance etc. were also an important part of the policy.\u201d<\/p>\n
According to him, \u201cthe impact of the policy was felt within the first
\ndecade of its implementation as Nigeria became self-sufficient in cement
\nproduction. Installed cement production capacity that has now grown from 3
\nmillion metric tons in 2002 to 44 million metric tons as at December 2017.
\nThe country has successfully transitioned from being a net importer to
\nself-sufficiency and then to a net exporter since 2017.\u201d<\/p>\n
In his remark earlier, Vice-Chancellor of the University of Ibadan, Prof.
\nAbel Idowu Olayinka thanked Alhaji Dangote for the building describing it
\nas a legacy that would forever be cherished generation yet unborn and by
\nthe donation, Dangote has become the first largest individual donor to the
\nuniversity.<\/p>\n
He explained that Dangote was to donate N250 million to the university but
\nthey prevailed on him to build the complex rather than giving money and
\nthat the decision has paid off for the university.
\nGovernor Isiaka Ajimobi of Oyo state, who is the Guest of Honour on the
\noccasion urged Nigerian youths to learn a big lesson from Dangote\u2019s humble
\nbeginning but with hard work has become one of the greatest entrepreneur
\nin Africa.<\/p>\n
The Governor who was represented by the state Commissioner of Education,
\nProf. Joseph Adeniyi Olowofela, lamented that most youths of today do not
\ncherish hard work but want to get rich quick which explained the increase
\nin social vices in the country<\/p>\n
\u201cWe need to shift the paradigm shift from the get rich quickly at all cost
\nto hard work that leads to wealth\u201d, he stated.<\/p>\n
The Director of the University of Ibadan, School of Business, Prof. Nike
\nOsofisan said the institution owed Alhaji Dangote a huge debt because the
\ncomplex was more than a building.<\/p>\n
She explained \u201cthe fully air conditioned complex has 9 lecture theatres,
\n10 lecturer offices, four Executive Director Offices, One Canteen, 250 KVA
\ndedicated Transformer, and male and female conveniences\u201d<\/p>\n
Leading businessman and Chairman of Aliko Dangote Foundation, Alhaji Aliko Dangote has challenged the government to muster the will to provide critical infrastructure that will make the nation\u2019s environment conducive…<\/p>\n","protected":false},"author":1,"featured_media":57161,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[5],"tags":[],"class_list":["post-63200","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\n