Dangote vs Bua: Borrowing from Ganduje’s Initiative
By Martins Oloja
POLITICS DIGEST – Abdullahi Umar Ganduje, Governor of Kano state who seems to be brushing aside that retrogressive weapon called political correctness to be a significant bridge builder between the North and the South appears to have realised too that he needs to be a peacemaker at home at this time.
The two business giants (who hail from Kano) Alhaji Aliko Dangote, Chairman of Dangote Group, Africa’s richest man and Alhaji Abdussamad Isyaka Rabi’u, Chairman of BUA Group, have been fighting ‘a good fight’ over some business-related matters in the South. It is noteworthy that the two tycoons bowed to the initiative of their resourceful governor who brokered peace between them last week at the Governor’s Lodge in Abuja where they vowed to work together “for the growth and development of the country”.
The businessmen have been in the news over a rift on control of sugar production in the country. Both parties had dismissed the allegation that Dangote was planning to see to the increase of sugar price, through pressurising BUA to succumb to the increment.
‘Origin of the conflict’
In the statement on the resolution of the conflcit, the governor’s Chief Press Secretary, Mr. Abba Anwar, said the reconciliation meeting took place on Wednesday in Abuja. Anwar said the meeting was held to end claims that the duo was at loggerheads over the control of sugar business in the country. According to the report, after the meeting, the leaders of the two companies agreed to work together to supply enough sugar to the country. “They all dismissed allegations that Dangote was planning to see the increase of sugar price, thereby pressurising BUA to succumb to the increment. They described the allegation as baseless and lacking any iota of truth. The meeting was seen as the zenith of other similar efforts to reconcile the two giants by the governor. Alhaji Aminu Alhassan Dantata played the role of a father during the meeting,” the statement added. The meeting was also attended by some prominent Kano indigenes, including Alhaji Aminu Alhassan Dantata; a representative of the Emir of Kano and Sarkin Dawaki Babba, Alhaji Aminu Babba Dan Agundi; Chairman of Nigeria Export Processing Zones Authority (NEPZA), Mr. Adamu Fanda; Chairman Kano State Council of Jumaat Mosque Imams and the Imam of Ahmadu Tijjani Mosque, Kofar Mata, Sheikh Nasir Adam, and the Minister of Industry, Trade and Investment, Mr. Niyi Adebayo. In their separate remarks, Ganduje and Dantata admonished the two businessmen on the danger the economy may face if they allow the misunderstanding between them to grow.
In their response, the two business moguls promised to avoid anything capable of creating misunderstanding between them.
We need to understand that the conflict between the two prominent businessmen from Kano isn’t new, after all. Even Reuters, an international news agency was among reporters of the grudge in 2017 when BUA Group asked President Muhammadu Buhari to intervene in a Dangote mining feud.
Then it was reported that Nigerian conglomerate BUA group had accused Dangote group of trying to force it to relinquish mining rights in a limestone field as part of a bid to monopolise the cement market and asked the president to intervene, according to a letter BUA’s chairman authorised.
Both BUA and Dangote have an interest in cement in Nigeria and have expanded rapidly across Africa. Nigeria, which has Africa’s biggest economy, has become a cement exporter from being a net importer. But the 2016 recession and currency crisis had hit domestic demand, reducing sales for companies, which were then trying to cut costs.
BUA’s chairman, Abdulsamad Rabiu, said Dangote group was undermining security around his plant in south-south Edo state, a region with limestone, a key ingredient in cement. Dangote’s cement operation is in the central state of Kogi. A Dangote group spokesman then referred news media to the Mines ministry statement and said he did not wish to comment further on the issue. The Mines ministry said BUA group did not have a mining lease for the disputed site, which is the subject of a legal case. The ministry, in a statement, also said it had issued a stop work order to BUA. It said the area was within a section owned by Dangote.
“Our cement business has of late come under intense, consistent attacks … as the minister, Dangote group and their cohorts have sought to employ instruments of state … to forcefully wrest control of our mining areas,” BUA said in a letter to President Muhammadu Buhari. Rabiu called on Buhari to investigate. He said the company was under pressure to relinquish its mining area to Dangote. Dangote group, majority owned by Africa’s richest man Aliko Dangote, already has around 70 per cent of market share in terms of output in Nigeria. Lafarge Africa, the local unit of Franco-Swiss cement maker, LafargeHolcim ranks second, industry analysts said then.
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Last week, (specifically, on April 8, 2021), before the peace mission in Abuja, there again emerged another crisis, between Dangote, Bua groups, this time it was not over cement, it was a dispute over who controls the sugar market in Africa’s biggest economy. While Dangote accused his competitor of attempting to appropriate undue advantage, Rabiu said Dangote wanted to monopolise the market and manipulate prices. Dangote denied the price-fixing allegation in a statement on April 9.
But documents obtained on the dispute have thrown some light on the accusations and counter-accusations by the two sides, and the government’s role in the feud. In January this year, Dangote Sugar Plc, supported by Flour Mills of Nigeria Plc, accused rival BUA International Limited of skirting the backward integration policy of the National Sugar Development Council (NSDC) by setting up a sugar refinery in Port Harcourt. Backward integration is simply a business model in which a firm expands into its supply chain rather than buy raw materials elsewhere. As an example, instead of buying maize from external suppliers like farmers, a company producing infant food may choose to invest and own maize farms and supply itself. This often helps in reducing cost. There is also forward integration, in which a company buys its own products for other purposes.
In the sugar business context, the Nigerian government through the regulator, NSDC, has mandated sugar companies not to build refineries and process imported sugar extract, but invest in developing the supply side — namely, sugar cane plantations. This is expected to reduce Nigeria’s import-dependence, stimulate the economy, create jobs and support the Naira.
While that is being developed to meet the country’s demand volume, the NSDC allocates quotas of sugar extract firms can bring into the country based on its backward integration investment size. Dangote Sugar Plc, supported by Flour Mills of Nigeria Plc, two of Nigeria largest sugar makers, argues that BUA has not met the backward integration requirement of the government to set up a new refinery, which they believe would confer an advantage on the firm. The government had in 2019 assured that no new sugar refinery would be allowed for now, they said.
In a joint letter to the Minister of Industry, Trade and Investment, Niyi Adebayo, Mr Dangote and John Coumantaros, respectively chairs of Dangote Sugar and Flour Mills of Nigeria, argued that BUA’s new refinery in Port Harcourt could stand-in the way of “the attainment of the National Sugar Master Plan (NSMP) and the sustainability of Nigeria’s local sugar industry.”
The migration of the ‘good fight’ from cement to sugar was the point at which the peace maker, Governor Ganduje stepped in last week and the rest they say is history. ‘Blessed are the peace makers…’, I believe.
Doubtless, we need more Gandujes at this time to work for reconciliation, lest we will shout ourselves into trouble again as we did from 1964 to 1966 when we lost federalism and self-governance to ‘soldiers of fortune’. Now we are shouting for restoration of federalism from the creators of the ‘Federal Republic of the Nigerian Army” we have been running. There are so many irreconcilable differences in all parts of the country that require wisdom and presence of our elders without making noise. This country needs quiet operators like Ganduje who would not want to throw away the babies and the bathwaters all over the place. There have been too many broken walls we need Nehemiahs at all levels to rebuild, lest we will be too divided to develop the country together. We need the Nehemiahs who will weep over the debris, the swamp we have stepped into because of incompetence and corruption of our leaders at all levels. This should not be read as a campaign weapon for Ganduje. It is not, as conspiracy theorists always conclude these days. Let’s just give him the credit that he deserves as a peacemaker at this time. You don’t have to be president or governor to be significant in your country. You may need to be political leaders to be prominent but you don’t have to be elected as a president or vice president to be significant as a citizen.
You don’t have to be a minister or a group chief executive of an oil corporation to be significant. You may need such positions just to be prominent. But as Rick Warren, that purpose-driven cleric and author I have repeatedly quoted here teaches, not all prominent people are significant, after all. According to the author of ‘The Purpose-Driven Life’, you can be prominent without being significant because not all prominent people in this world are significant. In the same vein, you can be significant without being prominent but God the almighty, our creator is daily waiting for significant people to remake the world and prepare people for his kingdom. So, those ‘crisis entrepreneurs’ who would like to seek gains from the national insecurity our country is facing, so that they can be prominent enough to seek leadership positions in the country should note that they will not be regarded as significant in the country. We will point out the place of notoriety in their prominence and so they will surely get their reward sooner than later here on earth. We can’t continue to be potential leader of the black race as the federation with a complex diversity is slipping away from us, no thanks to incompetence everywhere we go now. Here is the thing, we need authentic reconcilers, for instance who will reconcile the ‘aggrieved’ and seemingly ‘unforgiving’ Fulani boys who have taken to the forests to be bandits. Professor Yusuf Usman, not an ignorant Fulani brand ambassador, told us at a webinar on banditry and kidnapping last week Thursday that the Fulani nation is desperately fighting some injustice done to them, although another contributor told him that the Fulani should not think they have “monopoly of grievances”. We need reconcilers and peacemakers like Ganduje, anyway so that we can find peaceful settings to do business of developing our country.
Martins Oloja is a columnist with the Guardian
