By Tochukwu Bliss, Abuja
President of the Dangote Group, Aliko Dangote, has advocated for policies that safeguard domestic industries and cultivate them into indigenous champions capable of generating jobs and fostering prosperity in the face of current global economic woes.
In a keynote address on: “Rethinking Manufacturing in Nigeria,” at the Nigeria Manufacturers’ Summit in Abuja, Mr. Dangote was quoted as saying that there are various factors contributing to the underperformance of the manufacturing sector.
Reiterating that Nigeria has what it takes to be prosperous, he argued that these issues required rejigging government policy and its approach toward investments and investors, according to the Group’s statement yesterday.
He noted that industrial or manufacturing entities are not like trading entities while expressing his belief that the fundamental role and responsibility of government should be not only to promote investments and attract investors in manufacturing but also to ensure that these investments are nurtured and protected to facilitate growth and sustainability.
“In every economic regime, including the most advanced, investment projects in manufacturing and industrial sectors need time and a conducive environment for them to mature, build capacity and scale, to become competitive against those in older and more mature markets.
“But since the Mid 1980’s non-industrialized countries and their leaders have been discouraged from protecting and supporting such investment and forced to expose them to unfair competition from stronger, older competitors in their own internal market, even before the newcomers are commissioned. Yet these same older/bigger players are well supported in their home markets,” he was quoted.
Mr. Dangote cited global developments in Russia and some parts of Europe, and specifically referred to Asia as having achieved significant levels of industrialization by pursuing industrial policies where the government played an active role in nurturing and supporting local companies.
They subsequently leveraged this success to attract foreign direct investment (FDI) into Free Trade Zones.
I am concerned with a long-term policy framework which ensures that investors can invest with the understanding that the industry will in the long run be regarded as a national asset and not just investor’s assets.
Protecting local industries
According to Mr. Dangote, the government’s protection of local industries is not just only about short to medium-term regulatory mechanisms like tax holidays and other incentives but should be applied when necessary to mitigate investment challenges.
He continued: “I am concerned with a long-term policy framework which ensures that investors can invest with the understanding that the industry will in the long run be regarded as a national asset and not just investor’s assets.
“As such, when it is threatened either by external forces or by changes in the environment beyond the control of individual operators, the government will take appropriate action to protect investors and support them to survive the threat.
“Almost all countries did this in response to the COVID threat. Those in the pharmaceutical industry may well remember how India protected and supported its pharmaceutical industry.”
He cited the refining, textile and tyre sub-sectors, which have now become moribund industries despite flourishing in the 80’s and early 90’s.
“If we had adopted such a policy and Government attitude to industry in the 80’s and early 90’s, perhaps our economy today will still be benefitting from the job creation capacities of these industries.
“Or if we had adopted this attitude to our refining industry, Nigerians would not today be too anxious about Dangote Refinery,” he stated.
Disputing assertions that protecting domestic industries leads to reduced competitiveness or monopoly, Mr. Dangote argued to the contrary, citing examples such as China, Korea, India, and various other Asian nations.
He added that these countries successfully developed into robust economies and posed a challenge to the established global economic order precisely because they protected their industries.
He noted that in the past, Nigeria was not competitive in cement production, producing less than 2 million tons of cement per annum up to 2007, until due to strategic government policies and support, the country has since become Africa’s largest cement producer and exporter, ranking among the top 10 globally in competitiveness.
“In 2023, Dangote Cement alone paid more taxes into the coffers of the government than the entire banking industry,” he added.
Reiterating that Nigeria has all it takes to develop and sustain a globally competitive manufacturing sector, Mr. Dangote called for re-thinking of her industrialization policy by learning from leading countries in the West and the East, who are actively protecting their domestic industries.
