omohayek:


This enthusiasm is just another manifestation of the Nigerian tendency to worship success, regardless of how that success has been achieved, or even if it has been achieved at the very expense of those doing the worshiping. To hear so many of the cheerleaders go on, you'd think Dangote was some great innovator, when in reality his true "genius" (if one can call it that) was in cultivating the right political contacts to snare monopolies in first rice importation and then cement. It hardly takes a great business mind to make tremendous amounts of money when you're the only one producing something as essential as cement, and can get away with charging 4-5 times the world price. Dangote's billions have been made at the expense of every single homeowner in Nigeria, from the wealthiest to those of the most modest means, and yet the majority of his victims see him as a hero!

When one hears that a serial monopolist and crony capitalist like Dangote is investing in a petroleum refinery, a sensible person's first reaction should be to wonder what the rip-off will be this time around. When one learns that said crony capitalist is insisting that the oil subsidy remain in place for him to finish his refinery, alarm bells should be going off.

The only reason why nobody has invested in domestic refineries to date is because the oil subsidy would require private investors to sell their product below cost, and this is the very same reason why the NNPC refineries are always breaking down and requiring turn-around maintenance - they can't charge enough for their output to cover their running costs. It's not as if refining crude oil is a high-margin business either, so by what magic is Dangote going to be making his money back?

It's a pity that most Nigerians are both easily dazzled by wealth and ignorant of even the rudiments of finance, otherwise there'd be a lot less jubilation on here and a lot more scrutinizing of the details. I suspect that closer examination of Dangote's new scheme will reveal a future cost to the Nigerian masses far more substantial than even what the oil marketers have already cost in terms of wasted expenditure.

I once went through the half year report of Dangote Cement and sales were 248b and post tax profits were 124.8b.

That means if he slashed his cement price by half, he would still declare profit after tax!