Dangote and the Tyranny of Economists – Chidi Amuta
Here is a confession. I have an abiding distaste for conventional economists and all the other money mongers who choose to earn a living pontificating on the fate of the money in everybody’s pocket.
The reason is simple. Nearly every self- respecting economist that I know is something of a philosopher of unequal variables. The theology of unknown and unequal variables is a zone of cloudy mystique and enlightened doublespeak only open to the initiated cultists of formal economics. Graphs, holograms and statistical projections are readily deployed in copious PowerPoint presentations to illustrate their projections and pronouncements on our economic present and future. In all of this, there is a certain obsession with the unequal things of life.
And when you are about to hold them to the veracity of their pronouncements, they spring the inevitable escapist clincher: ‘all things being equal’. But you know that things are never and will never be equal in the real world. So, economists, like Delphic oracles, can never be caught on the wrong side of their own prophesies!
In place of economists and pundits, I have developed an arcane fish monger’s approach to making my economic judgments about places and countries that I visit in my itinerant career. If I go to a place and notice that money changers and bankers are close to the throne and fare better than those who manufacture goods and deliver the best services, I conclude that something is wrong there.
Also, wherever I go and see that the majority are poor but optimistic and bustling with hope and energy, striving for a better tomorrow while having access to the basic things of life, I know it is a good place waiting to happen.
Better still, when I visit a place and notice that more people are buying or building new houses, registering new cars, trooping to the shopping centres and taking occasional vacations, I begin to trust those wily creatures, the politicians. They must have bought their way into people’s hearts and pockets through sensible policies and sound governance.
On the contrary, when I notice that professional economists and bankers are in cahoots with politicians, my antenna goes up. Worse still, when this unholy triumvirate begin addressing conferences, delivering lectures and making elaborate PowerPoint presentations with graphs, holograms, dense figures about some economic paradise in the horizon, you know they are hiding something. Just step outside the conference venues and see for yourself. You are likely to see angry unemployed youth, a disappearing middle class, desperate housewives, retirees unpaid for months and a sea of sad poverty stricken humanity. In such a place, just buy or borrow the day’s tabloid and the headlines are unmistakable: rising suicide rates, kidnappings, armed robbery, banditry, domestic violence etc. I have learnt not to stay in such places for too long except of course it is my own country!
Barely a fortnight ago, the Central Bank of Nigeria gathered a select group of Nigeria’s all too familiar pantheon of establishment economists, bankers, government technocrats, sundry political handy men and a handful of real entrepreneurs to reflect on the growth potentials of the Nigerian economy. The gathering, code- named ‘Growth 2.0 Forum’ was ordinarily a routine assessment conference which every active economy needs periodically.
I reckon that this forum may have been necessitated by the recently much hyped modest rise in Nigeria’s GDP growth rate from 2.29% in 2018 to 2.52% in 2019. All considered, the figure is somehow more positive than earlier parlous predictions by the IMF and other interested merchants of gloom.
The Central Bank of Nigeria initiative would ordinarily be a good idea in the circumstances. A modest positive statistical movement in the nation’s GDP prospects was obviously a cause for the politicians to feel some elation which understandably sent the government in Abuja into a chest -beating frenzy. Being naturally averse to and even skeptical about the use of statistics for political lies on economic matters, I do not understand the basis of the frenzy.
When economists come up with the usual technical jargon for measuring economic health, I treat them like the weatherman. Do not give me all that ‘light precipitation’, ‘scattered thunderstorms over large areas’ or likelihood of haze. Tell me if its is going to rain so that I leave home with an umbrella or raincoat! In response to economists’ jargon, I tend to revert more to real life experiences or real people.
In today’s Nigeria, people are getting poorer. Life expectancy is dropping. Honest hard working people cannot afford to build or rent new houses or buy new cars. Retail figures are dismal even in the open local markets. Health care is almost non -existent. An unprecedented migration of millions into poverty has fueled crime and destitution to a degree never before dreamed of. A dysfunctional educational system is spewing thousands of semi educated youth into a non-existent labour market. Being an illiterate in these complex economic categories and terminologies, I do not understand GDP growth independent of the living conditions of real people.
Yet, the timing of the Central Bank conference was fortuitous and tragically misjudged. It put a question mark on both common sense and the political altruism of the organizers. It was in the midst of of an unfolding global economic uncertainty necessitated by the ravages of the Corona virus pandemic. The scourge was inching towards the treasuries of even the most formidable economies and was keeping the best of leaders awake on the plight of their nations and their peoples. The world was bracing for economic decline or even depression while the Nigerian establishment economists were busy celebrating a phantom growth potential without much basic strategic commonsense.
A day after the forum, an elaborate presentation pageant trooped to Aso Rock to hand in the findings of the ‘growth forum’ to the ever imperious President Buhari. The day before, oil prices had slumped to an abysmal $30 and was still falling. Global stock markets were on a southward tailspin and leaders of the developed world and their own economic pontiffs were busy crunching a different set of numbers in preparation for the worst. Given the setting, it appeared that Nigeria’s political leadership and the Central Bank’s PowerPoint economists and bankers were acting oblivious of events in the real world. We are still largely in that state of self -delusion.
This is the background to Mr. Dangote’s latest intervention in our economic discourse. Mr. Dangote, a man of few words, was present at the Central Bank forum and made the presentation of an active entrepreneur and economic nationalist. His point of departure was an implicit rebuttal and even indictment of the projections of the conventional court economists. His point of departure was that the issue of diversification of the Nigerian economy had become urgent. He recalled that the subject had dominated economic discourse since he came to Lagos as a simple trader in 1979, a 41 years time frame. It is significant that the same tribe of economists had made the same presentations to successive political leaderships for the better part of over four decades with little impact. We have remained an oil and gas rent dependent economy ever since. For that long, our economists have preached the gospel of diversification without variation. In spite of these presentations, we have become even more dependent and mono cultural in terms of national revenue.
For Mr. Dangote, therefore, the point of departure is the dividing line between economic pontification and the actual business of investing in industries that truly diversify the national economy. For him, economists may have succeeded in theorizing on and enumerating the positives of a diversified national economy. But his self -defined approach has been to invest in that diversification directly through a diversified portfolio of manufacturing ventures that provide the needs of the people while offering needed employment to thousands.
The practical entrepreneur in Dangote then proceeded to give the Central Bank forum and indeed the Nigerian public an instructive lecture on practical economic nationalism based on prevailing statistics. According to Dangote, we imported goods worth $47 billion in 2019 alone. A 60% reduction in this figure through local manufacturing and agriculture would significantly reduce unemployment and boost foreign exchange viability.
Abysmal infrastructure contributes to the problems of the manufacturing sector. For instance, businesses spend anywhere between $5-10 billion annually in alternative power generation. The roads are bad and so the movement of raw materials and finished goods is cumbersome just as truck maintenance drives down the profitability of his group by up to 20%. He also challenged the Central Bank to help the economy by providing cheap long term financing for businesses.
Instructively and quite significantly, Dangote is not impressed by the excessive premium which the Nigerian Customs Service and the Federal Inland Revenue Service place on customs duty collected on imports. In his view, high import duty revenue indicates that we are content with remaining an import dependent nation. On the contrary, the aim should be to raise the volume of excise duty on manufacturing by increasing the volume of manufacturing over and above importation.
The economists at the forum may have done what they are known for; explaining our economic world and its woes. But Mr. Dangote clearly demonstrated that he has been engaged in the business of helping to substantially change our economic landscape in real terms, one product at a time. In this regard, he pointed to specific achievements: national self sufficiency in cement, a push towards imminent self sufficiency in petroleum products, fertilizer, rice, and sugar by the Dangote group. He is now involved in infrastructure through road construction using cement as the dominant material for more durable roads.
The perceptible impact of Mr. Dangote’s robust entrepreneurship and economic nationalism on Nigeria’s economic landscape is a challenge to his contemporaries. The Dangote proposition is one which raises a number of issues about the place of the private sector in shaping Nigeria’s future as a free market economy.
Without manufacturing, there can be no middle class and therefore no genuine self- driven national development. With Dangote’s focus on providing a broad range of essential products that meet the daily needs of ordinary people, the day is not too far off when the daily experience of the average Nigerian will be ruled by homegrown products.
The image of the middle class Nigerian of the future will look somewhat like this: A dashing young man or woman that works in a Dangote subsidiary, lives in an apartment built with Dangote cement, arrives for the meeting in an Innoson car, powered by Dangote gasoline which drove through a cement road built by Dangote Construction.
In the process of giving practical effect to economic diversification and national self sufficiency, Mr. Dangote is raising many fundamental questions even as he labours to provide answers to many others. Can the economic nationalism of one businessman become the driving force for the common good of an entire nation? Can the profit motive of the individual entrepreneur drive the goal of combating inequality by making available, at affordable prices, the goods that divide citizens into classes? Does the individual private entrepreneur have a social responsibility beyond the profitability of his enterprises? Questions and yet more questions.
Somehow, I think that Mr. Dangote, by pursuing his vision and business interests, may have raised the stakes in defining the future role of capitalism in the Nigerian society. He has done this in a manner that defies and benumbs conventional economists and their long tyranny over the rest of us.
Chidi Amuta is a member of TNG’s editorial advisory board