Dangote, the Congo plant and the imperative of African industrialization

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Aliko Dangote, president and chief executive officer of Dangote Sugar Refinery Plc, listens during the U.S. Africa Business Forum in New York, U.S., on Wednesday, Sept. 21, 2016. The forum focuses on trade and investment opportunities on the continent for African heads of government and American business leaders. Photographer: Michael Nagle/Bloomberg via Getty Images

By Ehiedu Iweriebor

NEW YORK, United States of America, November 29, 2017/ — The Dangote Group of Nigeria, one of the pre-eminent industrial conglomerates in Africa, in pursuit of its pan-African development and emancipation strategy, on November 23, 2017 formally launched its newest economic development industrial project, the Dangote Cement plant in Mfila, in Congo-Brazzaville. With this $300 million dollars, 1.5 million metric tonne per annum plant, the Group now has a presence in ten of the 17 countries in which it plans to construct and expand cement plans. While it had to re-calibrate the pace and timing of its earlier ambitious plans to complete its various planned plants at an earlier date, because of the economic down turn in Nigeria from 2014, the completion of the Congo plant indicates that the Group’s Pan-African cement plant’s expansion and new plants’ construction programme is still very much on course even though the pace of completion is now staggered over a longer time frame.

This new plant, as an industrial project will have direct and indirect benefits in Congo-Brazzaville that domestic resource-based industrial projects plants usually generate. It is expected to provide at least 1,000 direct jobs and numerous other employment opportunities that will be stimulated by its presence. For example other sectors that will be stimulated include the following: expansion of local civil and housing construction projects by state and private builders; expansion of cement block makers; the establishment of a transportation fleet for the distribution of the cement and the employment of drivers, conductors and mechanics for the trucks; the expanded use of fuel; the emergence of small and medium scale cement distributors and even big distribution companies and workers and new sale stores; banks, food suppliers and sellers of small dry goods and items. In short, the impact of this plant will be the progressive creation of new economic activities and employment opportunities. From these new economic activities the Congolese state, the local government and community authorities will derive Internally Generated Revenues (IGR) that did not previously exist.

The various speeches at the launching of the Congo-Brazzaville plant highlighted the economic development significance and prospective impact of this massive industrial project. President Denis Sassou Nguesso of Congo-Brazzaville, noted that the plant was the biggest industrial plant in the country and the investment represented an industrial revolution within the regional group – Economic Community of Central African States. He noted that from their assessment of the impact of Dangote cement plants in other countries, they had always stimulated multiplier effects through the promotion of complementary and cognate industries and hoped that similar multiple direct and indirect effects will happen in the country. He also noted the timeliness of the take-off of the plant as a contributor to state revenues at a time when his government’s revenues had precipitously declined by 31.3 percent and oil sector revenues had also declined by 65.1 due to the fall in oil prices.

Clearly the Congo-Brazzaville government appreciates the investment, presence and impact of the Dangote cement plant.

In his own address, the Nigerian President Muhammadu Buhari, affirmed that Aliko Dangote and the Dangote Group by their pan-African investments had emerged as “worthy Ambassadors” of the country. He highlighted the various areas in which the Dangote Group had through its massive investments in the cement sector changed the course of Nigeria’s economic history. These include the provision of a key material for infrastructure development, the introduction of road construction with cement, the pursuit of expansion through backward integration and import substitution and the achievement of national self-sufficiency in cement availability and the contributions to savings of over $2 billion dollars annually from the termination of dependency through importation.

Aliko Dangote, President of the Dangote Group, in his address articulated the significance of the plant in terms of timely completion, its contribution of widespread availability of affordable cement, the plant’s contribution to the country’s expanded cement production capacity in excess of current demand and the consequence of reducing dependency on cement importation. He also noted that the plant will contribute to the country’s economic renaissance through foreign exchange conservation, employment generation, infrastructure expansion and multiple economic activities.

Dangote graciously and gratefully highlighted the strong and dedicated support provided by the government and people of Congo-Brazzaville from project’s conception to completion. Partly in pursuit of the Group’s philosophy and strategy of Corporate Social Responsibility, the Group was implementing several social projects including school construction, provision of scholarships, renovation of a hospital, road construction and bridge renovation. It also affirmed its company’s policy and commitment to give priority in employment to indigenes of the area of the plant’s location.

The various addresses highlighted the great economic impact of the Dangote’s chosen investments in cement production. But they did not often directly and fully underscore the actual primary sources of its revolutionary impact as a specific type of non-dependent industrial project with its inherent catalytic consequences. That is that they are resource-based industrial plants whose production are based on the exploitation and processing of a local resource. In short, the reasons for the great impact of these projects is that unlike the more common, attractive and lucrative arenas of foreign direct investment (FDI) such as extractive, wasting and non-development sectors like mineral and mining sectors and enclave assembly plant industries that are unconnected to the local economic environment, Dangote chose a different trajectory.

The Dangote Group’s choice of resource-based industrialization based on a comprehensive backward integration strategy as the primary pathway and its contribution to African self-actuated and self-directed economic development, prosperity generation, transformation and emancipation is developmentally apt, strategic and fecund.

This can best be understood within the perspective of Africa’s greatest failure in the post-independence era: economic development. This has been due to the failure to create and apply an autonomous economic philosophy and strategy of self-actuated development based on the well-established principles of endogenous technology capacitation and industrialization. On the contrary, African states and leaders at independence chose the maintenance of the inherited colonial economy, and in the neo-colonial framework of the times, the focus became the expansion of the production and export of raw materials: agricultural and mineral; the mass importation of consumer goods, intermediate goods and capital goods. This entailed the corresponding non-domestication of the historically established levers of development levers: the productive forces – technology and industrialization and equally importantly the ideological premise of development: the psychologically disposition, political will and activated self-agency for self-actuated and self-reliant development that is imperative to any successful development.

The result of this failure of the inherited and non-development neo-colonial economic system and strategy has been the condition of growth without development characterized by the persistence of underdevelopment, expanded dependency and poverty generation. The fact is that no African state since independence from the 1950s has been able to establish and sustain a philosophy, policy and strategy of self-actuated development and secure domestic prosperity generation.

This economic development failure was aggravated by the largely successful recolonization of African economic development objectives, policies, strategies and programmes in the 1980s through the acceptance, imposition and implementation of the Multilateral imperialist agencies – World Bank and International Monetary Fund(IMF) – non-development dogmas embodied in their Structural Adjustment Programmes (SAP) by the African leadership and states. Based on the unproven and unvarying dogmas called conditionalities: currency devaluation, trade liberalization, removal of subsidies, deregulation and privatization, they were not intended in any way to address the core causes of the balance of payments crisis of African economies of the late 1970s and early 1980s, that is African countries development incapacitation, raw material exports, dependency, mass importation, non-industrialization, under-production and poverty generation. It was the African leaders inability or unwillingness to identify and address these fundamental issues and their preference for pre-packaged supposedly neutral external “expert technical” solutions that led them as supplicants to these neo-imperialist agencies.

The substantive objective of these imperialist agencies was to forcefully return the incrementally economically self-directed African states back into the conditions economic colonialism with its exclusive focus on primary commodities (raw materials) production and export and dependency on importation of all manufactured goods. Furthermore, the World Bank and IMF also wanted to effect the removal of African states’ as promoters and activators of economic and social development especially freedom conferring industrialization through the cession of development responsibility by privatization to the undeveloped and dependent local capitalist groups; but more consequentially to foreigners through the fetish of foreign Direct Investments (FDI) as the new promoters of African “economic development”. But the FDI fetish is a dangerously misleading dogma of non-development: it misdirects, misrepresents and disarms societies and leaderships from ownership and responsibility for the philosophy, objectives, strategies for their own societies’ development.

The ability of external forces to inflict these damaging, disruptive and painful consequences of neo-colonial economic failure and their expression in persistent underdevelopment, dependency, underproduction, poverty, beggarliness, humiliation and indignity on Africans, has been possible due to active and direct complicity of much of African leaderships’ and elite who were successfully programmed to marginalize African agency and responsibility for its own development. These African elite enthroned and accepted foreign diktat, policies and programmes as inescapable for African development.

Yet this situation of the subservience and servility of the psychologically programmed African leadership, elite, intelligentsia has not been uniformly one-dimensional. Not all African leaderships, elite, intelligentsia, business people, bureaucrats and technocrats have supinely conceded to Africa’s surrender, submission and acquiescence to conditions permanent underdevelopment and cession of self-responsibility for development to others. Some among these were patriotic elite and leaderships who came to the ineluctable and correct conclusion that Africa can only enter into the state of freedom, dignified existence and a prosperous world by the pro-active choice and creation of its own philosophy and strategy of self-actuated development. This new development strategy will comprise the assumption of responsibility; the centrality of African agency; technological capacitation; modernization of all productive forces including agriculture and mineral production but above all the relentless pursuit of mass industrialization and mass production as the indisputable pathway and proven expressions of societal self-modernization in the contemporary world.

In the African business world today, it can be said without equivocation that Dangote and the Dangote Group has been and is in the vanguard of the promotion African self-development through resource based development capacitation; backward integration and genuine import substitution; radical reduction of import dependency for consumer goods and industrial inputs; mass industrialization, mass production and in-country and incontinent prosperity generation.

The expansive range of the industrial products of the Dangote Group beyond cement; and including food and agro industry: sugar, salt, tomato, rice, pasta, milk, flour; poly products and heavy industry like motor vehicles, coal mining and processing, refined petroleum, fertilizer and petrochemicals all attest to the promoter and Group’s understanding of the centrality of industrialization to genuine economic diversification and successful societal development and advancement.

The opening of the Congo cement plant within the Dangote Group’s pan-African industrial development strategy and its multiplier effects, creation of diverse employment opportunities and in-country prosperity generation, all attests to the Group’s contribution economic development and empowerment, and re-dignifying of Africans through the single-minded commitment to economic advancement through industrialization.

What is now required of African states, leaderships, technocratic and bureaucratic elite and business leaders and intelligentsia is following Dangote’s example, to prioritize technological capacitation and industrialization as the indisputable foundations and pathways for the project of Africa’s self-conceived, self-directed, self-funded and self-actuated and non-dependent programme of radical economic transformation and renaissance in the modern era. Only liberated African peoples, states and leaders can create this made in Africa – Africa by Africans for Africans and the world.

Ehiedu Iweriebor is a Professor, Department of Africana and Puerto Rican/Latino Studies, Hunter College, City University of New York, USA.

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