₦airaland Forum

Ovie,
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For a couple of years now, I have been the Chairman and sole member of the Alhaji Putin Haters Club (APHC). I am now tired.

When you are unable to beat them, joining them is not such a disgraceful option.


Today, Alhaji released 2015 (January to December) results for Dangote Cement and they were glorious. Hating this guy is a waste of time — it is his country and you all are merely living in it.

A summary of the results can be found at Nairametrics

Financial highlights

Revenue up 25.6% to ₦491.7B as new plants perform strongly across Africa

EBITDA up 17.5% to ₦262.4B at 53.4% margin

All plants profitable across Africa

Earnings per share up 15.2% to ₦10.86

Dividend up 33.3% to ₦8.0 per share at 73.7% payout ratio

Strong cash generation funds dividend and capex, net debt falls to ₦204.2B (0.78x EBITDA)

But that is not really the interesting part. When you have a look at how they have been doing over the last 6 years, it tells a much better story.

A friend has pulled out the revenues, profit before tax and actual tax paid. I made them into the chart below.
Dangote Cement 2010–2015

To summarise — Dangote Cement clocked N1.86trillion in revenues over 6 years of which, N1trillion was profits. The company paid N12billion of that in taxes. That is, the effective tax rate (based on actual tax paid) of the company over those 6 years was 1%.

Even if you are turning water into wine, it is doubtful that you will be able to make this kind of profit.

How is he able to get away with paying practically nothing in taxes? Alhaji has turned the use of ‘pioneer status’ into an art form. In the latest results, the company managed to get pioneer status again by extending the Ibese Plant. It seems that every time he builds something, he gets pioneer status for it.

A couple of years ago, I did a comparison between Dangote Cement and other cement manufacturers around the world based on profitability. Alhaji is not their mate. At all. (See the spreadsheet here).

Dangote vs The World



There isn't much to add to this. These figures are not hidden. They are all publicly available as published by the company. Perhaps the best place to hide something is in plain sight.

What is clear is that Nigerians are paying more than double international prices for cement while Alhaji makes sweet profits and pays no taxes. He also owns 92% of the company meaning that the vast majority of the dividends paid flow to him.

Meanwhile, according to the Medium Term Expenditure Framework (MTEF) document, the Federal Government expects to collect N1.53trillion in company taxes this year. If Alhaji is paying the equivalent of coins, it is safe to say that even a miracle cannot help FIRS hit that figure.

To add insult to injury, Alhaji also gets the choice meat from the fx pot at N199 to $1. Even his erstwhile buddy, Abdulsamad Rabiu came out publicly to complain about his preferential access to forex in this time of scarcity:

It is rather ironic that a similar competitor in the same industry, who incidentally is the market leader, is allocated huge amount of Nigeria’s hard earned and scarce FX from the official market for its operation in Congo. I do not know if there is an official policy to that effect but I was baffled, as were numerous Nigerians, to learn through a publication of FX allocation returns by First Bank of Nigeria in Thisday Newspaper of Tuesday, February 16, 2016 (page 11) of that allocation whilst other operators in the industry have received far less or nothing at all during the same period for verifiable and viable investments within Nigeria.

It begs the question, “were other plants by that operator across Africa built with Nigeria’s money?” how has that impacted the Country’s economy in return? If this is true, then it needs to be checked as we cannot have a situation where Nigerian industries are been shut down, workers are losing their jobs daily and resources badly needed to develop our economy are being taken out of the county to grow other economies to the detriment of ours. If this transactions was done through a “form A” like the publication suggested, then it is just money that has gone out of the country which can be rerouted into the country for other purposes.

It bears repeating — Nigeria is subsidising his expansion across Africa while he enjoys absurd profits in a protected market without paying taxes.

In January, the Central Bank Governor, the biddable Godwin Emefiele, went to tuale at the site of the Dangote Refinery in Lagos. After assuring him of access to subsidised forex, he then delivered the money quote:

"our support will encourage more Nigerians to begin to think like the Dangote Group"



That’s right. The problem is that you people cannot think. That is why you’re not like Dangote.

Use your head. The man owns the country and you should be grateful that he has not yet started asking you to pay tithes to him.

FF
NigeriaTaxesEconomics
Go to the profile of Feyi Fawehinmi
Feyi Fawehinmi

Accountant | Amateur Economist | Wannabe Photographer | Blog — aguntasolo.com | Tweets @doubleeph | Take the current when it serves or lose your ventures

Alhaji Putin is milking this country dry, Nigeria belongs to him, making a lot of profit without paying the commensurate tax, he collects FX from the CBN at N199 to $1 to establish cement companies in Africa, how can you explain that his 20MT Cement factory made more profit than any other factory in the world.

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Fhemmmy:
Hump of the week already..... every praise is due to our God

In a series of post on corruption which he shared on his Facebook wall recently, the Chairman of telecommunications company, Econet and Zimbabwe's richest man, Strive Maiyiwa, described how former Delta state governor James Ibori, who is serving jail term in the UK, allegedly demanded a $4.5 million bribe from him to set up and successful operate his business in Nigeria, promising to send him and his company parking from Nigeria if he failed to give the bribe.

Masiyiwa in his post said Lagos and Delta state governments were co-investors when he brought the company into Nigeria. He said after he and other investors succeeded in bringing in the company into Nigeria, he was asked to pay a bribe totaling $9 million to top politicians. He also accused top politicians from Kenya, Zimbabwe, Liberia of being extremely corrupt and also demanding for bribe. He made so many accusations, your head will literally spin. Read his expository post after the cut..



Part 1
I had the privilege of making Nigeria’s first GSM phone call back in 2001 when I called the regulator to say, “We’re live!” Who would’ve believed then that Nigeria today would have more than 167 million mobile phones?!
It all started out as a very exciting new chapter for enterprise in Africa. Shortly after President Obasanjo was elected, the new government announced an incredibly transparent international auction process for three national mobile phone licenses.
To participate in the bid, you not only had to raise money, but there had to be a member of the bidding consortium who was an experienced GSM operator. Econet Wireless met the requirements because of its experience in Zimbabwe and Botswana. Our Nigerian partners, which included state governments, local banks and high net worth individuals, were financial investors. The largest shareholder had only 10%. That was the written agreement.
I managed to assemble a consortium of 22 investors to put up the money needed to bid. Our shareholders were all Nigerian, mostly institutional investors including leading banks and two state governments, Lagos State and Delta State. The license cost us $285m and was the most expensive license ever issued in Africa at the time. This was 2001.
We considered the investment not only about putting together a network, but also about building a nation. We knew it had the potential to transform Nigeria’s entire business and social architecture.
Most of our investors had between 1-10% shareholding. Econet Wireless Nigeria had only 5% of the shares, but that was fine because it was 5% ownership of a very big pie.
As the "technical partner and operator," Econet was the company with the expertise to build and operate such a business. Our financial investors recognised this, and also allowed us to receive 3% of the turnover as our fees. This was standard practice in the industry.
We were one of the winning bidders and they gave us just six months to set up business and get our network operating. We were under a lot of pressure but our network was live two days before the others! Customers were pouring in. We were number one in the market with an estimated 57% market share.
___Then came the fateful day when I was told that our company must pay a total of $9m in bribes to senior politicians (in state government) who had facilitated the raising of the money to pay for the license.
I refused to authorise the illegal payments. Meeting after meeting was held to try to get me to agree, but I would not. The money would not be paid as long as Econet was the operator and I had signing authority.
James Ibori, the Governor of Delta State, was demanding $4,5m be paid to him in his personal capacity. He was one of the most powerful men in the country and had a reputation for violence. When he heard that I was refusing to approve payment he issued an ultimatum:
___"Pay or I will chase you and your people out of the country."
I refused.
The shareholders met and voted Econet Wireless Nigeria out of management. They cancelled our management contract. James Ibori and his colleagues personally attended the meeting to remove us. After the meeting one of them (a prominent local businessman even today) came up to me and said: "Unfortunately for you, God does not have a vote."
I had to withdraw all my staff and their families: 200 people in all. We left Nigeria.
Most of our people had to be retrenched. The loss of the contract almost drove us to bankruptcy as a group.
They invited a big international operator to replace us as technical partner and operator. They changed the name of the company from Econet to V-Mobile.
Within days of their arrival, the managers of the new operator signed off the payments demanded as bribes.
Then what happened?
A few noble Nigerians had both the integrity and courage to carefully collect all the documentation on the movement of the money, and pass it all on to me.
___There’s a saying worth remembering in uncovering the trail of destruction that is corruption: “Follow the money”…
I bided my time... then I wrote a letter to the United States Department of Justice!
It was 2003.

Part 2
Nigeria has an agency known as the Economic and Financial Crimes Commission (EFCC). After we had to leave the country, a few noble people at the company tipped off not only me but the EFCC about the payment of the bribes, which had by this time risen from $9m to $13,5m.
I had never actually heard about this agency myself until I got a call from the Nigerian Embassy in South Africa to say they wanted to come and see me to interview me as a witness.
A team of very senior EFCC officers came to see us in South Africa. They were solid and professional in their enquiry. It was clear they wanted to do something about it.
However, when these officers returned home to Nigeria, they got into very serious trouble. Their investigations into the irregular payments had been brought to the attention of James Ibori (Governor of Delta State)…
Soon thereafter, the most senior officer leading the investigation was demoted and sent to a remote part of the country as an ordinary policeman!
Agencies like EFCC in Nigeria sometimes have brave and gallant law enforcement officers. Unfortunately, as I observed, they’re often let down by their political bosses, and sometimes even by the courts. This can change if activism from the citizenry emerges to support their work.
___We should not only support official efforts to stop corruption but also help these agencies and organisations in their investigations. If you have relevant information about illegal activities, passing it on could make all the difference between impunity and imprisonment.
In my letter to the US Justice Department, I detailed the full history of the demands for a bribe. I had dates, times, records. I then reminded them that since the big international operator had a listing on the New York Stock Exchange, they were duty-bound to launch an enquiry. Why did I go to them?
The United States government has a law called the Foreign Corrupt Practices Act. The United Kingdom has a similar one called the British Anti-Bribery Act. Whatever you do, make sure you never fall foul of those laws because, if they ever use them to come after you, you’re a "gonner" my friends.
A few weeks later, US officials wrote back advising me that an enquiry had been launched. They contacted the big international company seeking answers to my allegations. My contacts at the company called to tell me, "All hell has broken loose at the company."
The parent company of the South African-based multinational sent external auditors and lawyers from London to Nigeria. They immediately dismissed all the senior executives sent to Nigeria to run the company, and they left in a hurry!
Although they fled the scene of the crime and returned to their country -- after admitting even to both the US Justice Department and the EFCC that the money had been paid out – the stolen funds were never returned to the Nigerian people, even to this day.
Meanwhile, the departure of the other mobile operator did not mean we could return to Nigeria. The shareholders found another operator, this time from the Middle East.
They sold this new operator the control of the company even though Econet Wireless Nigeria had the "right of first refusal" over any sale. They simply ignored that provision in our agreement. This was illegal, both according to our shareholders agreement and Nigerian Company Law. It was left for us to take up the fight in another forum, the Nigerian courts.

Part 3

The state government of Akwa Ibom held 15% of the equity in Econet Wireless Nigeria. This state was not one of the original investors but joined us later.
After five years, the governor of the state of Akwa Ibom decided to sell its stake. It had more than doubled in value in dollar terms, which meant it had been a good investment.
The state governor, an elderly gentleman called Victor Attah, sent a message through a friend that he wanted to see me in London to find out if I was interested in exercising Econet’s right to buy its shares. I agreed to meet him in London.
"I want to sell the shares to build an airport before I leave office," the governor explained.
The governor was accompanied to the meeting by a British lawyer who sat quietly taking notes. His name was Bhadresh Gohil.
With a wave of his hand, the governor said, "Mr Gohil is our legal advisor here in London. I have instructed him to handle all our negotiations with you."
The meeting did not last more than 30 minutes, as the governor was on his way to catch a flight to the U.S.
We agreed with Mr Gohil that we would meet with my own advisors a few days later to start the process.
A few days later, I went to his office with a professional banker who advised me on such transactions. We met in the lawyer's plush London offices. He was confident and smooth-spoken as he explained how much we were expected to pay. Then he explained that our money was to go to a "Special Purpose Vehicle" (SPV) before it was transferred to Nigeria. It was a sophisticated structure and he showed me a drawing of how it would work. I wrote it all down very carefully into my notebook.
___Such corporate entities as SPVs can definitely have legitimate purposes, but this one did not!
As I quizzed him about why such an unusual structure was necessary, Mr Gohil changed tact and tried to entice me with an offer I could not refuse (or so he hoped): "I'm also the advisor to the governor of Delta State, Mr James Ibori, and if you agree to pay for these shares using this structure, we will offer you shares belonging to all the state governments. In total, you can have more than 30% additional shares. It will be enough to take control of the company. My clients just want out, and they are willing to give you what you have always wanted."
I listened to him, quietly taking notes in my small notebook. I did not give away anything, but inside I was very angry. From the design of the structure, I knew immediately that it was meant to siphon off money before it reached the state governments. It was clear there was a conspiracy to steal a lot of money.
___Having already pocketed $13.5m, now the government officials could easily pocket probably another $100m through the sale process that they had developed with the help of Mr Gohil and other clever advisors in London!
When I left the meeting I immediately contacted the mutual friend who'd set up the governor's meeting. The friend was so embarrassed as I explained the corrupt structure clearly designed to steal money from the state governments. He promised to raise the issue with Governor Victor Attah. A few days later he came back and said Governor Attah had claimed ignorance about the proposal put to me by Mr Gohil. He said he would speak to Mr Gohil and tell him it had to be done properly without the structures.
We never heard from them again. Mr Gohil simply vanished. A few months later we were told that the shares had been offered to a company from the Middle East who subsequently bought them. I was not privy to how they did it except that they had violated my right to buy the shares... That is another chapter in the saga, but not for now.
Fast-forward three years, long after the sale. Our lawyers in London called me one day and asked if I could come urgently to a meeting with the Proceeds of Corruption Unit of the London Metropolitan Police: "You are not in any trouble, but I think you will find what they have to say very interesting!"
This special unit was launched by the British to investigate corruption by foreign government officials who try to launder stolen money to the U.S. and the UK.
The officers asked me to explain everything I knew about the sale of V-Mobile shares to Celtel (later Zain).
I explained the history of the entire transaction and the shareholders disputes that had led to our departure. After awhile, they asked me to focus on specific events, and, in particular, my meetings in London with the governor of Akwa Ibom, and also the meetings with Mr Gohil. It became clear to me that they had a lot of information!
"What can you tell us about this structure, using a Special Purpose Vehicle?"
I explained my understanding of it. Later on, I gave them my diary in which I had recorded the details of my meeting that day with Mr Gohil.
Below my drawing of the structure, I had written in bold letters:
"This is corrupt!!!"
Not long after my meeting with the Proceeds of Corruption Unit, Mr Gohil was arrested together with one of his partners and several others. I later learned that when the Middle Eastern company bought the shares, some of the proceeds had been diverted using the Gohil structure. Some of the money was sent to a bank in London. This large amount of money was enough to alert the British authorities that money was being laundered through their banking system.
Their investigations led them to Gohil and his associates. They raided his offices and found stashes of documents, including details of the structures. Now they were looking for witnesses to help prosecute them for corruption and money laundering.
The British authorities tried without success to get other parties, including the governor of Akwa Ibom, to come out and clear their names but they refused. Officials of President Umaru Musa Yar'Aduah's government successfully thwarted all extradition requests.
I was asked to be a witness in the trial of those who had been arrested in London. I willingly accepted. Next I will tell you about my role as a 'Witness to the Crown" on behalf of the people of Nigeria whose money had been stolen. It would be the first time that someone big went to jail (in a foreign country) for stealing money from Africans.

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inze:
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FowlYansh:
You are a disgraced to womanhood for this comment you just said. Igbo women supporting a fulani gambari who instigated violence that killed a lot of our fellow Igbos after they lost an election is a brigandish that I can't comprehend.

Just an humble Opinion. Nothing personal

What a pity, your name says it all and I can smell you from here.

kamair237:
some pipo no know were their rights start and end.... I tut it was one Nigeria... the government has d right tooo do and on do Soo far as it concerns 9ja... Make dem create space for Dat prison quick quick... boko convicts are coming to south

This Boko haram prisoners has been in the east since 2012 and was transferred there by Goodluck Azikiwe Jonathan. Next story plz.

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searching4love:




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