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Dangote, the Congo plant and the imperative of African industrialization

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By Ehiedu Iweriebor

 

THE Dangote Group of Nigeria, one of the pre-eminent industrial conglomerates in Africa, in pursuit of its pan-African development and emancipation strategy, on November 23, 2017 formally launched its newest economic development industrial project, the Dangote Cement plant in Mfila, in Congo-Brazzaville. With this $300 million dollars, 1.5 million metric tonne per annum plant, the Group now has a presence in ten of the 17 countries in which it plans to construct and expand cement plans.  While it had to re-calibrate the pace and timing of its earlier ambitious plans to complete its various planned plants at an earlier date, because of the economic down turn in Nigeria from 2014, the completion of the Congo plant indicates that the Group’s Pan-African cement plant’s expansion and new plants’ construction programme is still very much on course even though the pace of completion is now staggered over a longer time frame.

This new plant, as an industrial project will have direct and indirect benefits in Congo-Brazzaville that domestic resource-based industrial projects plants usually generate. It is expected to provide at least 1,000 direct jobs and numerous other employment opportunities that will be stimulated by its presence. For example other sectors that will be stimulated include the following: expansion of local civil and housing construction projects by state and private builders; expansion of cement block makers; the establishment of a transportation fleet for the distribution of the cement and the employment of drivers, conductors and mechanics for the trucks; the expanded use of fuel; the emergence of small and medium scale cement distributors and even big distribution companies and workers and new sale stores; banks, food suppliers and sellers of small dry goods and items. In short, the impact of this plant will be the progressive creation of new economic activities and employment opportunities. From these new economic activities the Congolese state, the local government and community authorities will derive Internally Generated Revenues (IGR) that did not previously exist.

The various speeches at the launching of the Congo-Brazzaville plant highlighted the economic development significance and prospective impact of this this massive industrial project. President Denis Sassou Nguesso of Congo-Brazzaville, noted that the plant was the biggest industrial plant in the country and the investment represented an industrial revolution within the regional group – Economic Community of Central African States. He noted that from their assessment of the impact of Dangote cement plants in other countries, they had always stimulated multiplier effects through the promotion of complementary and cognate industries and hoped that similar multiple direct and indirect effects will happen in the country. He also noted the timeliness of the take-off of the plant as a contributor to state revenues at a time when his government’s revenues had precipitously declined by 31.3 percent and oil sector revenues had also declined by 65.1 due to the fall in oil prices.

Clearly the Congo-Brazzaville government appreciates the investment, presence and impact of the Dangote cement plant.

In his own address, the Nigerian President Muhammadu Buhari, affirmed that Aliko Dangote and the Dangote Group by their pan-African investments had emerged as “worthy Ambassadors” of the country. He highlighted the various areas in which the Dangote Group had through its massive investments in the cement sector changed the course of Nigeria’s economic history. These include the provision of a key material for infrastructure development, the introduction of road construction with cement, the pursuit of expansion through backward integration and import substitution and the achievement of national self-sufficiency in cement availability and the contributions to savings of over $2 billion dollars annually from the termination of dependency through importation.

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Aliko Dangote, President of the Dangote Group, in his address articulated the significance of the plant in terms of timely completion, its contribution of widespread availability of affordable cement, the plant’s contribution to the country’s expanded cement production capacity in excess of current demand and the consequence of reducing dependency on cement importation. He also noted that the plant will contribute to the country’s economic renaissance through foreign exchange conservation, employment generation, infrastructure expansion and multiple economic activities.

Dangote graciously and gratefully highlighted the strong and dedicated support provided by the government and people of Congo-Brazzaville from project’s conception to completion. Partly in pursuit of the Group’s philosophy and strategy of Corporate Social Responsibility, the Group was implementing several social projects including school construction, provision of scholarships, renovation of a hospital, road construction and bridge renovation. It also affirmed its company’s policy and commitment to give priority in employment to indigenes of the area of the plant’s location.

The various addresses highlighted the great economic impact of the Dangote’s chosen investments in cement production. But they did not often directly and fully underscore the actual primary sources of its revolutionary impact as a specific type of non-dependent industrial project with its inherent catalytic consequences. That is that they are resource-based industrial plants whose production are based on the exploitation and processing of a local resource. In short, the reasons for the great impact of these projects is that unlike the more common, attractive and lucrative arenas of foreign direct investment (FDI) such as extractive, wasting and non-development sectors like mineral and mining sectors and enclave assembly plant industries that are unconnected to the local economic environment, Dangote chose a different trajectory.

The Dangote Group’s choice of resource-based industrialization based on a comprehensive backward integration strategy as the primary pathway and its contribution to African self-actuated and self-directed economic development, prosperity generation, transformation and emancipation is developmentally apt, strategic and fecund.

This can best be understood within the perspective of Africa’s greatest failure in the post-independence era: economic development. This has been due to the failure to create and apply an autonomous economic philosophy and strategy of self-actuated development based on the well-established principles of endogenous technology capacitation and industrialization. On the contrary, African states and leaders at independence chose the maintenance of the inherited colonial economy, and in the neo-colonial framework of the times, the focus became the expansion of the production and export of raw materials: agricultural and mineral; the mass importation of consumer goods, intermediate goods and capital goods. This entailed the corresponding non-domestication of the historically established levers of development levers: the productive forces – technology and industrialization and equally importantly the ideological premise of development: the psychologically disposition, political will and activated self-agency for self-actuated and self-reliant development that is imperative to any successful development.

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The result of this failure of the inherited and non-development neo-colonial economic system and strategy has been the condition of growth without development characterized by the persistence of underdevelopment, expanded dependency and poverty generation. The fact is that no African state since independence from the 1950s has been able to establish and sustain a philosophy, policy and strategy of self-actuated development and secure domestic prosperity generation.

This economic development failure was aggravated by the largely successful recolonization of African economic development objectives, policies, strategies and programmes in the 1980s through the acceptance, imposition and implementation of the Multilateral imperialist agencies – World Bank and International Monetary Fund(IMF) – non-development dogmas embodied in their Structural Adjustment Programmes (SAP) by the African leadership and states. Based on the unproven and unvarying dogmas called conditionalities: currency devaluation, trade liberalization, removal of subsidies, deregulation and privatization, they were not intended in any way to address the core causes of the balance of payments crisis of African economies of the late 1970s and early 1980s, that is African countries development incapacitation, raw material exports, dependency, mass importation, non-industrialization, under-production and poverty generation. It was the African leaders inability or unwillingness to identify and address these fundamental issues and their preference for pre-packaged supposedly neutral external “expert technical” solutions that led them as supplicants to these neo-imperialist agencies.

The substantive objective of these imperialist agencies was to forcefully return the incrementally economically self-directed African states back into the conditions economic colonialism with its exclusive focus on primary commodities (raw materials) production and export and dependency on importation of all manufactured goods. Furthermore, the World Bank and IMF also wanted to effect the removal of African states’ as promoters and activators of economic and social development especially freedom conferring industrialization through the cession of development responsibility by privatization to the undeveloped and dependent local capitalist groups; but more consequentially to foreigners through the fetish of foreign Direct Investments (FDI) as the new promoters of African “economic development”. But the FDI fetish is a dangerously misleading dogma of non-development: it misdirects, misrepresents and disarms societies and leaderships from ownership and responsibility for the philosophy, objectives, strategies for their own societies’ development.

The ability of external forces to inflict these damaging, disruptive and painful consequences of neo-colonial economic failure and their expression in persistent underdevelopment, dependency, underproduction, poverty, beggarliness, humiliation and indignity on Africans, has been possible due to active and direct complicity of much of African  leaderships’ and elite who were successfully programmed to marginalize African agency and responsibility for its own development. These African elite enthroned and accepted foreign diktat, policies and programmes as inescapable for African development.

Yet this situation of the subservience and servility of the psychologically programmed African leadership, elite, intelligentsia has not been uniformly one-dimensional.  Not all African leaderships, elite, intelligentsia, business people, bureaucrats and technocrats have supinely conceded to Africa’s surrender, submission and acquiescence to conditions permanent underdevelopment and cession of self-responsibility for development to others. Some among these were patriotic elite and leaderships who came to the ineluctable and correct conclusion that Africa can only enter into the state of freedom, dignified existence and a prosperous world by the pro-active choice and creation of its own philosophy and strategy of self-actuated development. This new development strategy will comprise the assumption of responsibility; the centrality of African agency; technological capacitation; modernization of all productive forces including agriculture and mineral production but above all the relentless pursuit of mass industrialization and mass production as the indisputable pathway and proven expressions of societal self-modernization in the contemporary world.

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In the African business world today, it can be said without equivocation that Dangote and the Dangote Group has been and is in the vanguard of the promotion African self-development through resource based development capacitation; backward integration and genuine import substitution; radical reduction of import dependency for consumer goods and industrial inputs; mass industrialization, mass production and in-country and incontinent prosperity generation.

The expansive range of the industrial products of the Dangote Group beyond cement; and including food and agro industry: sugar, salt, tomato, rice, pasta, milk, flour; poly products and heavy industry like motor vehicles, coal mining and processing, refined petroleum, fertilizer and petrochemicals all attest to the promoter and Group’s understanding of the centrality of industrialization to genuine economic diversification and successful societal development and advancement.

The opening of the Congo cement plant within the Dangote Group’s pan-African industrial development strategy and its multiplier effects, creation of diverse employment opportunities and in-country prosperity generation, all attests to the Group’s contribution economic development and empowerment, and re-dignifying of Africans through the single-minded commitment to economic advancement through industrialization.

What is now required of African states, leaderships, technocratic and bureaucratic elite and business leaders and intelligentsia is following Dangote’s example, to prioritize technological capacitation and industrialization as the indisputable foundations and pathways for the project of Africa’s self-conceived, self-directed, self-funded and self-actuated and non-dependent programme of radical economic transformation and renaissance in the modern era. Only liberated African peoples, states and leaders can create this made in Africa – Africa by Africans for Africans and the world.

 

Ehiedu Iweriebor is a Professor, Department of Africana and Puerto Rican/Latino Studies, Hunter College, City University of New York, USA.

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Bitcoin Hits $50,000 For First Time Since 2021

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A picture taken on February 6, 2018 shows a visual representation of the digital crypto-currency Bitcoin, at the “Bitcoin Change” shop in the Israeli city of Tel Aviv. (Photo by JACK GUEZ / AFP)

Bitcoin surpassed the $50,000 mark on Tuesday, marking its highest value in over two years.

Investor optimism surged as anticipation grew regarding broader trading approval in the US, with hopes riding high on potential green lights for cryptocurrency exchange-traded funds (ETFs).

Despite an initial dip following Washington’s approval signal last month, Bitcoin has rebounded impressively, boasting a 25 percent rally since January 22.

As of the latest data from Bloomberg, the cryptocurrency peaked at $50,328, underscoring the resilience and upward momentum in the crypto market, leaving observers optimistic about its future trajectory.

“Enthusiast buyers bring in more enthusiast buyers pushing prices further up,” Fadi Aboualfa, of Copper Technologies, said.

“The cryptocurrency has momentum on the back of several green weeks and has a large chance of going up further when markets see weekly movements upwards of 10 percent (as we saw last week).”

By 0330 GMT Tuesday, bitcoin had dropped slightly, to $49,950.

While Bitcoin has made an impressive recovery, currently standing above $50,000, it still lags significantly behind its peak value of nearly $69,000 in 2020. This rally signals a bounce-back for the cryptocurrency, which faced turbulent times marked by high-profile scandals and collapses within the crypto industry.

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Last year, FTX, the world’s second-largest crypto exchange, suffered a dramatic downfall, with its CEO, Sam Bankman-Fried, now confronting potential consequences. Prosecutors have characterised the situation as “one of the biggest financial frauds in American history,” and Bankman-Fried faces the looming threat of up to 110 years in prison.

In November, Changpeng “CZ” Zhao resigned as CEO of Binance, the world’s largest crypto exchange, following both his and the company’s admission of guilt in extensive money laundering violations.

Bitcoin’s upward trajectory is further fueled by optimism surrounding potential interest rate cuts by the US Federal Reserve this year, as inflation appears to be easing. The cryptocurrency’s value is also influenced by an anticipated supply crunch next year, attributed to the recurring event known as “halving.”

Bitcoin, earned through intricate problem-solving by powerful computers in a process called “mining,” experiences a reduction in reward every four years. With the next “halving” scheduled for April, the limited supply dynamic continues to be a driving force behind Bitcoin’s value surge.

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Microsoft Joins Apple In $3 Trillion Club

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Microsoft joined Apple on Wednesday as a three trillion dollar company, as its big bet on artificial intelligence continued to impress Wall Street.

Now second to Apple as the world’s biggest company by market capitalization, Microsoft’s shares were up 1.31 percent at $404.

 

Apple remains narrowly in first place at $3.02 trillion after reaching the $3 trillion market capitalization mark for the first time in January 2022.

 

But it has fallen below the milestone, even briefly losing the pole position as biggest company on the markets when Microsoft briefly overtook the iPhone maker earlier this month.

 

Microsoft more than any other tech giant is riding the wave of excitement over AI.

The Redmond, Washington-based group has a major partnership with OpenAI, creator of ChatGPT, that is reportedly worth $13 billion.

Since the arrival of ChatGPT, Microsoft has launched several products enabling companies and individuals to use the capabilities of generative AI, notably via its Bing search engine and Copilot virtual assistant.

Since the launch of ChatGPT in early November 2022, Microsoft shares have gained some 67 percent, with Apple’s up by about 40 percent.

Microsoft publishes its results on January 30.

 

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Nigeria: Shell Announces Sale of Onshore Oil Assets

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In an aerial view, gas prices nearing $6.00 a gallon are displayed at a Shell gas station on February 23, 2022 in San Francisco, California. Justin Sullivan/Getty Images/AFP

Shell has announced a deal to offload its Nigerian onshore subsidiary, the Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance.

The acquiring entity, Renaissance, stands as a consortium comprising four local exploration and production companies in Nigeria, alongside an international energy group.

Shell,  in a Tuesday statement on its website, said, “Completion of the transaction is subject to approvals by the Federal Government of Nigeria and other conditions.

“Transaction will preserve SPDC’s operating capabilities for the benefit of a joint venture. The transaction has been designed to preserve the full range of SPDC’s operating capabilities following the change of ownership. This includes the technical expertise, management systems, and processes that SPDC implements on behalf of all the companies in the SPDC Joint Venture (SPDC JV)”.

But, it said, “SPDC’s staff will continue to be employed by the company as it transitions to new ownership”.

Shell emphasised  that amidst the competitive landscape, the company remains committed to supporting the management of SPDC JV facilities. These facilities play a crucial role in supplying a significant portion of feed gas to Nigeria LNG (NLNG), highlighting Shell’s dedication to assisting the nation in maximizing value from its NLNG endeavors.

“This agreement marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our Deepwater and Integrated Gas positions,” Shell’s Integrated Gas and Upstream Director Zoë Yujnovich said.

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“It is a significant moment for SPDC, whose people have built it into a high-quality business over many years. Now, after decades as a pioneer in Nigeria’s energy sector, SPDC will move to its next chapter under the ownership of an experienced, ambitious Nigerian-led consortium.

“Shell sees a bright future in Nigeria with a positive investment outlook for its energy sector. We will continue to support the country’s growing energy needs and export ambitions in areas aligned with our strategy.”

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