By Lukmon Tajuddeen
The government of Nigeria through its various laws and agencies ensures regulation of businesses in the country. This is to guarantee ease of doing business for investors, entrepreneurs, business-oriented persons, as well as safeguarding the interests of consumers.
For almost two decades, the country’s agencies responsible for regulation of businesses seem to favour Dangote’s establishments at the detriment of other stakeholders, which is pushing the Nation’s economy toward disastrous end. It is noteworthy that Dangote’s business tactics s threatening other competitors, US had warned.
There is nothing wrong with businesses competing against one another, but competition should be healthy without eroding the progress made by other active players. Personification and monopoly in business arena is always a threat to other economic movers, without recourse to the wider implications when government policies favour only one player over other competitors.
When a business policy favours one interest, it presents a dilemma for a country’s economic policy, according to a report published in 2010 on Wikileak’s website.
The current situation which allows a leading manufacturer to engage other stakeholders in a bitter rivalry on who controls sugar and cement sectors in Nigeria is clearly a display of favouritism and degree of impunity – this stance on personalisation of cement and sugar has led to absurdly high prices of the two products.
It is in public knowledge, three years ago that Dangote Group attempted to start producing noodles. De United Foods Industries (makers of Indomie noodles) did not raise its voice nor lodged a complaint against DFW’s to the Minister of Industry, Trade and Investment for the Group’s attempt to start a noodle company.
Instead, it consolidated on its strategies, maintaining its market dominance in the country’s noodle industry (it has a share of around 70 percent). The company believed it had already become a household name and is not afraid of any competitor. DFW was left with no option than to sell two of its production lines to rival pasta maker. It’s not exactly clear why Dangote wouldn’t compete in the noodles market again as it earlier announced.
Now bubbles seemed to have busted with the recent sugar prices dispute in Nigeria, as Dangote Sugar and Flour Mills jointly forwarded a petition to the Minister of Industry, Trade and Investment, asking the Ministry to shut down BUA Group’s Sugar Refinery in Port Harcourt. Both companies requested the minister to launch a probe into the volume of raw sugar imported by BUA’s Port Harcourt refinery “and the appropriate penalty in terms of duty (60%) and level (10%) to be charged on the company”.
BUA in its defence clarified that the company’s sugar refinery in Port Harcourt would ensure “the attainment of the National Sugar Master Plan (NSMP) and the sustainability of Nigeria’s Local Sugar Industry.
The law allows him to operate the refinery to support its role as a counter-balance to the Dangote and Flour Mills duopoly in the price manipulation, while his company has also been working on an integration project, with BUA’s Lafiagi Sugar BIP, a $250 million sugar refinery set to be completed in 2022.
In addition, his Port Harcourt sugar refinery will not affect in any way the integration programme, adding that “the only way it will affect Nigerians is that Nigerians will pay lower prices for sugar. The law allows BUA to sell inside Nigeria – his sugar project was approved by President Muhammadu Buhari.
The main reason for the dispute is the duopoly plan to hike sugar prices during the holy month of Ramadan, they got across and put pressure on BUA owner to joint them to exploit consumers. His failure to do the bidding of the duo companies led to the accusations that he was breaking the law by selling sugar locally, instead of producing for export market.
To other stakeholders in sugar and flour, it is the right time to make good money, but BUA said no, even threatening to withdraw dealership license of his dealers who hiked prices of the commodities.
Last year, before Ramadan, sugar sold for around N18,000 per bag, but as Ramadan fasting started the price jumped to N30,000 per bag. From that experience, BUA saw no reason for the increase in price during Ramadan and therefore plan to end the ugly trend.
Let supervisory and regulatory agencies of businesses in the country do justice by allowing everyone to compete on the same terms. The Consumer doesn’t care which company controls the market – what matters to them is which company’s product has fair price. People are after affordable sugar and flour, if BUA can bring that, people will certainly patronise its product.
In an ideal market, businesses must compete against each other, but not for one entity to single-handedly monopolize the economy.
As the rest of the world races towards their ever-rising targets for national development and progress, Nigeria keeps loitering around the starting line, trying to figure out why its tactics of placing the carts in front of its horses is not working.
Nigeria is trying everything from share of luck to even prayer, albeit without success. The time has come to call all players to true account.
Lukmon Tajuddeen wrote in from Barnawa, Kaduna. He can be reached at lukmonraymond@yahoo.com
