The President and Chief Executive, Dangote Group, Aliko Dangote, on Wednesday said that Nigeria had not taken advantage of its huge population for economic growth, wondering why local content was being relegated while relying heavily on importation of goods and services.
Dangote, who was represented by Group Executive Director, Dangote Group, Ahmed Mansur, spoke on the topic, ‘Industrialisation-Backward integration as a strategy for national development: The story of the Dangote Group’, during the inauguration of the University of Ibadan Business School complex donated by the industrialist.
L-R: Jack Ma, Founder & Executive Chairman of Ali baba Group; Gordon Brown, former British Prime Minister and UN Special Envoy for Global Education; Aliko Dangote, President/CE, Dangote Group and Dr. Abdu Mukthar, Group Chief Strategy Officer, Dangote Industries Limited, at United Nations Education Commission launch of 'The Learning Generation' presented to the UN Secretary General Ban Kim Moon at the UN Headquarters in New York #Education #LearningGeneration #EducationCommission #SettingTheAgenda #GlobalLeaders
According to him, Nigeria is spending over N1.5tn annually on food importation, stressing that this puts a heavy pressure on the foreign reserves.
He explained that up to 80 per cent of the inputs in most manufacturing processes in Nigeria still relied on imported components, while noting that Dangote Group’s backward integration policy had birthed economic advantage for the country.
Dangote said, “With an enviable population and natural resources, not many countries have the advantages that Nigeria offers to manufacturers. Corporations like Dangote Industries that long ago embarked on backward integration are now starting to reap the benefits.
January 16, 2018: Dangote Refinery signed a partnership agreement with MAMMEOT Holding B.V. a company that provide heavy road transportation, equipment lifting, and crane rental and sales services. Image 1: CEO, MAMMEOT Holding B.V, Paul van Gelder; Group President/CE, Dangote Industries Limited, Aliko Dangote; and Group Executive Director, Strategy, Capital Projects & Portfolio Development, Dangote Industries Limited, Devakumar Edwin, during the partnership agreement signing event which took place at the Dangote Group head office, Lagos Nigeria. Image 2: Group Executive Director, Strategy, Capital Projects & Portfolio Development, Dangote Industries Limited, Devakumar Edwin; Group President/CE, Dangote Industries Limited, Aliko Dangote and CEO, MAMMEOT Holding B.V, Paul van Gelder Image 3: Group President/CE, Dangote Industries Limited, Aliko Dangote and CEO, MAMMEOT Holding B.V, Paul van Gelder #DangoteRefinery #Nigeria #Dangote
“Backward integration is when a business exerts control over sources of raw materials or other businesses that are part of the overall manufacturing process. For example, a cement trader becomes backward integrated when he takes ownership or control of bagging, cement grinding, and limestone mining.”
NBS identifies list major economic problems
The major problems in the country currently are unemployment and high cost of living, the National Bureau of Statistics has said.
According to the bureau, most Nigerians believe that if the government can tackle the high rate of joblessness across the country, the other problems will be significantly reduced.
Presenting key findings from the National Corruption Survey, entitled: ‘Corruption in Nigeria’, which was conducted by the bureau in conjunction with other agencies of government, at a corruption summit organised by Youth Alive Foundation in Abuja on Wednesday, the Director, Real Sector and Household Statistics, NBS, Isiaka Olanrewaju, stated that surprisingly, corruption did not emerge as the country’s major problem.
He said after the bureau conducted a survey on the percentage of Nigeria’s population who considered selected issues that were the most important problems affecting the country, it was discovered that unemployment was number one.
Olanrewaju noted, “Apart from talking about the issue of bribery and corruption, we also had peoples’ opinion on what they think is the major problem in Nigeria. And when we arranged them in order of mention, unemployment emerged as number one. “This is followed by high cost of living, and corruption came third.”
Nigeria’s External reserves drops to a three month low
The nation’s foreign exchange reserves have dropped to a three-month low of $47.303bn, data from the Central Bank of Nigeria showed on Wednesday. The reserves, which stood at $47.697bn on July 11, dropped by $394m in 13 days.
Data from the CBN revealed that the reserves rose from $47.333bn in April 24 to $47.846bn on May 11. The PUNCH reported on July 13 that the reserves, which rose from $47.605bn on May 31 to $47.789bn on June 29, dropped by $102m to $47.697bn on July 11.
The Managing Director, Blackbit Limited, Wale Ajibade, in a telephone interview with our correspondent, stated that the drastic decline in the reserves could be attributed to government action in supporting the exchange rate.
He said, “This is what is putting pressure on the external reserves. I believe that a free market should be allowed, but it is a complex situation because the exchange rate can go up and lead to heightened inflation. But in the long run, the exchange rate would likely see a further demolition in value because of the support.”
The Monetary Policy Committee of the Central Bank of Nigeria on Tuesday expressed optimism that the external reserves would see further accretion.
In the communiqué No 119 of the MPC meeting of July 23 and 24, 2018, which was released on Tuesday by the CBN, the MPC predicted further increases in the level of external reserves in the near term, citing the favourable crude oil prices.
The MPC advised the CBN to sustain its current efforts to maintain investor confidence and ensure accretion to external reserves.
It also called on the Federal Governent to continue to build fiscal buffers against possible oil price shocks in the future, noting that the rise in the monthly distribution of revenues at the Federation Account Allocation Committee portended danger of the absence of reserve buffers to absorb shocks in the future.