For Dangote, it is no longer business as usual

By Ilyasu Awada

In March, the US Justice Department, in a suit joined by 16 state district attorneys general, announced a historic anti-trust lawsuit against Apple, alleging the tech company “relies on exclusionary anti-competitive conduct” to unlawfully maintain its smartphone market dominance.

The move has not spooked the markets because at the heart of the markets is consumer protection, which can only be engendered by competitiveness.

However, the case has been different in Nigeria until recently. Though there is the Federal Competition and Consumer Protection Act (FCCPA), 2018 whose core function is to regulate competition and protection of consumers in Nigeria, the role of the regulator was surrendered to powerful entities who ride roughshod over Nigerians.

One such company that has dominated the consumer segment of the Nigerian market is Dangote Industries. Its ubiquitous presence is hardly missing in any home. From salt, sugar, noodles, seasonings, cement, car manufacturing and now petrol chemicals the Dangote Group looms large.

For those who have keenly followed the evolution of the company, it is no secret that it is predatory and brokers less or no competition, hence, its dominance.
If in doubt, ask Ibeto Industries and Bua in the fight to monopolise the lucrative cement market.

For years, the Dangote Group was locked in a battle of attrition with Ibeto Cement even when the federal government said the former had no business as a competitor dragging Ibeto Cement to court over its import licence of cement.

Incensed by the federal government’s approval to Ibeto by the government of former President Olusegun Obasanjo and being close friends then, Dangote was able to get the government of the day to halt Ibeto’s importation of cement, while Dangote continued to import, leading to his near-sole ownership of the cement market for years until when late President Umaru Yar’ Adua reversed his predecessor’s moratorium on Ibeto in July 2007.

Pricked by this, Dangote Cement PLC quickly filed a suit alleging that Ibeto Cement Company is gaining undue advantage by the federal government. However, the Federal Government and six of its agencies, argued that Dangote Cement PLC filed the suit with only one intention, to wipe out competition in cement business and become a monopoly.

The Federal Government also contended that Dangote cement has no locus in filing the suit as the matter didn’t concern them. It averred that the suit instituted by Ibeto Cement against the Federal Government was not fraudulent.

Furthermore, it argued that Dangote Cement was not a nominee or agent of government agencies, which are defendants in the suit, and is not acting on their behalf. It argued that that Dangote Cement Plc is not an agency of Federal Government with the statutory mandate of administering, managing or enforcing tax compliance, therefore lacking the locus standi to commence or maintain the legal action and seek the reliefs in the case.

This is just one of several instances that the company seeks to gain undue advantage, restrict competition and stifle the anti-trust provisions of the law.

Also, it emerged in 2022 that between 2019 and 2021, the Federal Government lost N16.76tn in revenue to tax reliefs, duty waivers, and concessions given to 46 large companies of which the Dangote Group featured prominently. While tax waivers in themselves are not bad as fiscal tools are used to stimulate economic activities or discourage certain harmful or inappropriate economic activities, the discriminatory practice has a telling effect on economic growth and inclusion.

Without a doubt, having enjoyed prebendal perks for long, the owners of Dangote Refinery had hoped it will be the same anti-people’s waivers they will get in operating their refinery as it has emerged.

What the company and its owners started with was to vilify regulators such as the NNPC, NUPRC and international oil companies as to its inability to get crude at less competitive price and to shutdown other operators in the oil and gas sector.

Posturing as a proletariat at the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in the Bahamas, Aliko Dangote, who is intent on his 650,000bl/d Dangote refinery being the sole provider of petrol chemicals in the country alleged that substandard fuel is rampant in Nigeria and across Africa, containing high levels of Sulphur and dirty.

Dangote has the opportunity to voice his concerns, if any, to the Nigerian authorities, no, he will rather posture as the untainted businessman who desires the best for his countrymen and women. If that were to be the case, the EFCC won’t have raided the headquarters of the company over opaque forex transactions in January this year. It is whispered in several quarters that a deal was made with the authorities owing to the adverse impact on foreign direct investment for the matter to be resolved back stage.

Now that it has emerged that the refinery is at the pre-commissioning stage and has not been licensed, one wonders why the shrill cries and sentiment whipping by the company.
For the avoidance of any ambiguity, it was Farouk Ahmed, the chief executive officer (CEO) of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) that made the startling revelation, which was yet to be debunked, almost 72 hours after.

Ahmed said, “Well, just like you rightly asked, there are lots of concerns about the supply of petroleum products nationwide and the claims by some media houses that we were trying to scuttle Dangote refinery; that is not so.
“Dangote refinery is still in the pre-commissioning stage. It has not been licensed yet. We have not licensed them yet.

“I think they are at about 45 percent completion. So we cannot rely heavily on one refinery to feed the nation because Dangote is requesting that we should suspend or stop all importation of petroleum products, especially automotive gas oil (AGO) or jet kero and direct all marketers to the refinery.”

For a fact, it will be foolhardy for the country to rely on a single source for its petrol and allied matter needs with dire implications for national security and economic growth as was the case with cement at a time. Even now, the House of Reps is probing the two dominant companies over highly priced cement in the country.

For too long has Dangote taken more from the Nigerian government and this cannot be the norm. While his commitment to the Nigerian economy is worthy of note, it must not come at a steep price for other investors and businesses. In this wise, the Nigerian government should stick to the letters of the law and offer a level playing field to all and sundry.

Awada, a public commentator, writes from Lafia, Nasarawa State.