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Dangote urges government to protect local industries to generate jobs, foster prosperity

L-R: Aliko Dangote, President of Dangote Group; Vice-President Kashim Shettima; and Otunba Francis Meshioye, President of MAN, During the MAN Summit in the Presidential Villa, Abuja, FCT Photo: Dangote Group

*Aliko Dangote, President of Dangote Industries Limited, advocates policies that safeguard and strengthen domestic industries, cultivating them into indigenous champions capable of generating jobs and fostering prosperity in the Nigerian economy

Isola Moses | ConsumerConnect

Aliko Dangote, President of the Dangote Group, has advocated 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.

Dangote said this while addressing the gathering of manufacturers and investors as the keynote speaker at the Nigeria Manufacturers’ Summit, in Abuja, FCT, in a speech titled, “Rethinking Manufacturing in Nigeria”.

ConsumerConnect reports the foremost entrepreneur averred Nigeria has what it takes to be prosperous in the comity of nations.

Dangote, who noted through there are various factors contributing to the underperformance of the manufacturing sector of the economy, emphasised that the crucial issue requiring attention is government policy and its approach toward investments and investors.

Role of government in promoting investments, facilitating growth and sustainability

He also explained that industrial or manufacturing entities are not like trading entities

The President/Chief Executive of Dangote Industries Limited (DIL) expressed 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.

Dangote stated: “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-industrialised countries and their leaders have been discouraged from protecting and supporting such investments 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.”

listed several examples of government intervention to protect industries: the blocked sale of US steel to Nippon Steel of Japan, the blocked sale of six US port management companies to Dubai Ports World, restrictions on Chinese cranes at US ports, and the US imposition of tariffs such as 100% on Chinese EVs, 50% on semiconductors, medical products, and solar panels.

He further cited the restriction of Russian gas supply to Europe, which led European countries to increase coal usage despite opposition to fossil fuels, and the US Government’s distribution of $39 billion in subsidies to incentivise local microchip production.

Dangote as well referred to Asia as having achieved significant levels of industrialisation by pursuing industrial policies by the government played an active role in nurturing and supporting local companies.

According to him, these economies subsequently, leveraged this success to attract Foreign Direct Investment (FDI) into Free Trade Zones (FTZs).

He emphasised that Government Protection of the industry does not solely encompass short to medium-term Regulatory Mechanisms, such as tax holidays and other incentives which have their place in industrial policy and should be applied when necessary to mitigate investment challenges.

“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 investors’ asset.

“So, when it is threatened, either by external forces or by changes in the environment beyond the control of individual operators, 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,” President of DIL said.

He equally noted: “Those in the pharmaceutical industry may well remember how India protected and supported its pharmaceutical industry.”

He also asserted that if such a policy had been adopted in the past, Nigeria would have attained a flourishing textile and tyre industry as well as functioning refineries.

Dangote stated: “If we had adopted such a policy and government attitude to the textile Industry and tyre 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.”

Disputing assertions that protecting domestic industries leads to reduced competitiveness, Dangote cited examples, such as China, Korea, India, and various other Asian economies.

He pointed out 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 two million tonnes of cement per annum up to 2007.

The leading entrepreneur recalled due to strategic government policies and support, Nigeria has since become Africa’s largest cement producer and exporter, ranking among the top 10 globally in competitiveness.

He disclosed noted that in 2023, Dangote Cement alone contributed more tax revenue to the government than the entire banking sector in the West African country.

“In the past, Nigeria was not competitive in cement production.

“Up to 2007, Nigeria produced less than 2m tonnes of cement per annum.

“Today, we have about 60m tonnes of production capacity and another 9m under construction,” said he.

The President of Dangote Group averred: “The foundation for this success story was laid by an administration which decided to extend full support and protection to Nigeria’s cement industry.

“Today, we are among the 10 most competitive cement producers in the world and the biggest cement producer and cement exporter in Africa. “In 2023, Dangote Cement alone paid more taxes into the coffers of the government than the entire banking industry.”

He also refuted claims that protecting industries would lead to monopoly, stating that it is common knowledge that foreign investors only come when they see that local investors are also doing well.

Dangote asserted: “I am convinced that when Government Policy becomes more supportive and protective, investors will be more willing to collaborate and partner with the Government in resolving other challenges, such as infrastructure deficits, market instabilities and macro-economic issues such as inflation and foreign exchange volatilities.”

Reiterating that Nigeria has all it takes to develop and sustain a globally competitive manufacturing sector, Dangote called for re-thinking of her industrialisation policy, by learning from leading countries in the West and the East that are actively protecting their domestic industries.

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