The politics of monopoly and oligarchy are familiar phenomena in Nigeria and beyond. During General Abacha's military rule in the 1990s, while working at the Federal Ministry of Finance, I witnessed first-hand the plight of a retired military officer who had become an entrepreneur. His product was threatened by a competitor who deliberately crashed the price of his good to make that of the retired officer uncompetitive. At that time, it was suspected that the military government was using the competitor to deal with the veteran, who later served in a civilian government.

That experience made me wary of monopolistic tendencies, often leading to concerns about the rise of oligarchies. For instance, Aliko Dangote's group of companies in Nigeria and Mukesh Ambani's Reliance Industries in India have dominant influence in their respective countries, raising concerns about the long-term effects of monopolistic tendencies.

In 2005, the administration of President Olusegun Obasanjo endorsed the formation of the Transnational Corporation of Nigeria (TCN), later renamed Transcorp. This conglomerate sought to acquire government-owned assets and venture into various sectors of the national economy.

The founding owners of Transcorp were budding oligarchs and private sector operators who knew how to navigate their ways around government in getting whatever they wanted. They included billionaires and financiers like Aliko Dangote, Femi Otedola, Jim Ovia, Tony Elumelu, and Festus Odimegwu. Other notable members were Bernard Longe, Jacobs Moyo Ajekigbe, Otunba Funsho Lawal, Tony Ezeanna, Adegboyega Olulade, and the late friend Waziri Mohammed.

The then Director General of the Nigerian Stock Exchange (NSE), Mrs Ndi Okereke-Onyiuke, served as the chairman of the Board of Directors. At the same time, her staff member, Nicholas Okoye, was the organisation's technical secretary and business strategy adviser.

In an article in June 2005 titled "President Dangote of Nigeria" (https://yashuaib.com/2005/06/on-president-aluko-dangote-of-nigeria/), I cautioned Dangote and others about the dangers of retrogressive monopoly, which weakens government regulations and kills healthy competition. Instead, I suggested that he and similarly inclined private sector players deploy infrastructural facilities and equipment to gain fair market share rather than acquiring public institutions at giveaway prices.

However, the following month, in July 2005, President Olusegun Obasanjo officially launched the conglomerate in the Presidential Villa, Abuja. It was, therefore, not surprising that the mega-firm benefitted immensely from the government's privatisation policy, as it raised N16 billion through private placement and acquired significant public assets. Some of these assets included a 71 per cent stake in NITEL, the Nicon-Noga Hilton Hotel, a 400,000-barrel per-day refinery concession, and oil blocs for upstream oil and gas operations, among other national possessions.

While the early promoters of Transcorp later became prominent advocates for Obasanjo's third-term agenda, there was a controversy surrounding President Obasanjo's acquisition of 200 million shares of Transcorp through a blind trust fund financed by a popular bank.

However, for whatever reasons, after acquiring and sharing some of the country's collective patrimonies, some of the founders of Transcorp appeared to have subsequently parted ways.

On his part, Aliko Dangote expanded his businesses into manufacturing like Mukesh Ambani, the wealthiest man in India, who is reputed to have lavished over $800 million on the recent wedding of his son, Anant Ambani, to Radhika Merchant, the daughter of Indian pharma tycoons, Viren and Shaila Merchant.

While Dangote has a flour milling company that produces wheat flour, pasta, noodles, and other baked products, Ambani’s investments include retail outlets that operate supermarkets and online trading platforms.

Similarly, besides his telecommunications company offering 4G and 5G services, comprising data and other digital products, Ambani also produces films, television shows, and digital content through his media and entertainment company. He equally operates large power generation plants and distribution companies.

On the other hand, Dangote additionally operates fertilizer and cement corporations in Nigeria and other African countries. He has also heavily invested in agriculture, focusing on producing rice, sugarcane, and tomato paste. In addition, Dangote refines salt and sugar for domestic consumption and export.

As nonpartisan and detribalised businesspeople, both Dangote and Ambani are generous to different political parties, religious groups, and cultural institutions. They also employ elite graduates from various ethnic backgrounds and engage youths in multiple roles in their enterprises.

The giant cash cow of Ambani is his Reliance Industry’s Jamnagar oil refinery, commissioned in 1999, with the capacity to produce 668,000 barrels of crude daily, which has since been upgraded to 1,240,000 barrels per day. The refinery has enhanced India's energy security by providing a reliable source of petroleum products, contributing to the country's GDP growth, and becoming a key player in India's energy sector.

When Dangote mooted the idea of building an oil refinery, as the Nigerian government failed to revive the existing ones or create new ones, many believed he was on the trajectory of receiving the usual incentives he gets from the government as one of Nigeria’s most prominent private sector players.

The success story of Ambani's refinery is attributed to the active support of the Indian government in encouraging investments in the energy sector through support that includes tax incentives, subsidies for importing crude oil, enabling the exportation of refined products, and relaxation of regulations to allow efficient operations. The government's monetary policies enabled banks and financial institutions to provide loans and credit facilities for indigenous projects.

With the government's magnanimity to the industry, India's economy benefits from Ambani's refinery, with thousands of jobs created, infrastructure development in the host communities, and foreign exchange earnings from exporting refined products. The company's operation also reduces dependence on imported refined products while generating significant revenue for the government through taxes, duties, and royalties.

Meanwhile, within just a few months of its operation this year, the multibillion-dollar Dangote refinery has created thousands of jobs, directly and indirectly, while stimulating economic growth.

Whilst there was excitement with the expectation that the refinery would increase the domestic refining capacity and reduce reliance on fuel importation, thus decreasing inflationary pressures, the government regulators recently publicly demarketed Dangote petroleum products.

Speaking on behalf of the government, the Managing Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engineer Farouk Ahmed claimed that the quality of products from the Dangote Refinery was inferior, citing a purported higher sulphur content of the diesel produced.

Claiming that the refinery had not yet been issued an operational license, and concern over monopoly and energy security, the NMDPRA pushed an argument for the continued importation of petroleum products from outside the country. The management of the Dangote Refinery has denied the allegations of either producing high sulphur content diesel and an attempt at becoming a monopoly.

The painful irony is the deliberate demarketing of the Dangote brand by his brethren from the North, working as regulators, after Southerners had provided him with an enabling environment for the business that would generate foreign exchange earnings, contribute to Nigeria's economic diversification, and ultimately stabilise the naira. The Northerners need rethinking.

Examples abound of how great nations implement policies to support indigenous industries through protectionist measures that give them a competitive edge in relation to foreign businesses. Such countries accomplish this through legitimate preferential concessions, the award of financial incentives, the creation of pathways for market access, regulatory backing, and offers of equity participation. If the system cannot support indigenous enterprises like Danote, it shouldn’t be seen as demarketing Nigerian brands. This can be considered as sinning against yourself.

•Yushau A. Shuaib, an Editor-in-Chief of PRNigeria and Economic Confidential

www.YAShuaib.com, yashuaib@yashuaib.com

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