I would say since 1999, two economic policies have always invoked the most extreme controversies – deregulation of the downstream sector of the petroleum industry and privatisation. But while deregulation, often understood to mean increase in fuel prices, is more often an economic debate with some political flavour, privatisation is highly political in nature, especially if the sold entity is a prize asset. It is always about who wins and who loses. There have also been “territory” issues. When the Benue Cement Company (BCC), Gboko, was sold to Alhaji Aliko Dangote many years ago, the controversy was unprecedented. It rekindled the historical tension between the Hausa/Fulani and the Tiv. But, thankfully, the acrimony was eventually resolved bloodlessly.
Today, there is another “territory” battle in Ebonyi State, where the privatisation of Nigercem Plc is raising fresh dust. The media war between the state government and Ibeto Group is so brutal you would be forgiven to think it is a case of Pakistan and India battling for the Kashmir region. What are the issues? Having gone through the positions of both sides to the Nigercem conflict, let me present my own summary of the issues. Nigercem, the oldest cement company in the country set up in 1954, was owned 60 per cent by the five South-eastern states of Anambra, Abia, Imo, Ebonyi and Enugu. Federal Government owned 10.5 per cent while the general public had 29.5 per cent.
In 2002, Federal Government and the South-eastern states decided to sell their combined 70.5 per cent equity. A Technical Committee on Privatisation was set up by the South-eastern states to sell the shares. Eastern Bulkcem Nigeria Limited (EBNL) was chosen as the core investor. Ebonyi, as the host state, later decided to buy 10 per cent from EBNL, which, to my mind, was an excellent investment decision. So far, so good. However, EBNL simply went to sleep. Or, rather, it started stripping Nigercem naked. It was cannibalised instead of being revitalised. EBNL was soon exchanging blows with the Ebonyi government. The case ended up in court as the C of O was withdrawn. Governor Martin Elechi of Ebonyi State officially announced the death of Nigercem Plc while presenting his 2010 budget to the State House of Assembly. End of Part One, if you like.
Enter Part Two. Last year, the Ibeto Group stepped in and bought out EBNL, effectively taking over Nigercem. This, I should think, offered a new chance to Nigercem. Ibeto offered to revitalise the moribund company and inject the needed investment. The new owners even ceded another 10 per cent to Ebonyi State, based on the request of the government, and issued a share certificate. A new board was constituted. Ebonyi nominated a board member. Everything seemed set for a jolly ride. As the Hausa would say, “Ga fili, ga doki.” Here is the field, here is the donkey! What else are you waiting for? But if it looked so simple, you are mistaken. Instead, that was the beginning of Part Three…
The Ebonyi State government allegedly changed its attitude when it came to moving to the next level. It now demanded to own 51 per cent of Nigercem, which will transfer the controlling stake to the state. The state government probably thinks since Nigercem is located within its territory, it should have the final say.
But this is an issue involving over 28,000 shareholders, including big corporates, so it would be very difficult to take back Nigercem just like that. To worsen matters, members of the National Assembly from the state issued a strongly worded statement against Ibeto, using the word “recolonisation of Ebonyi State”. Traditional rulers from Ishielu Local Government, where Nigercem is situated, were suspended by the state government for supporting Ibeto’s take-over.
What’s my take on this whole storm? Simple – jobs, jobs, jobs. If any state badly needs a factory up and running, creating a buzz of economic activities and generating thousands of jobs directly and indirectly, it is Ebonyi. I worry that a lot of time has been wasted already, since 2002. Moving forward is as urgent as yesterday. I also worry that if the state government continues to insist that it must have its way, this may create a stumbling block for any aspiring investor in the state. The notion that the government can do and undo irrespective of legal requirements can only discourage private investors. I further fear that if Ebonyi succeeds in muscling out Ibeto, the legal wrangling will go on for ages and Nigercem will remain moribund. Nobody stands to benefit from this acrimony.
Finally, I want to state clearly that I am completely against any attempt to revert Nigercem to state ownership. It will not work. In Nigeria, government ownership of commercial entities has been a complete disaster. When Obasanjo was leaving in 2007, he sold two refineries to Dangote and Femi Otedola. Some characters went and confused President Umaru Musa Yar’Adua, asking him to reverse the sale. These chaps collected billions of naira from Yar’Adua, promising to fix the refineries in a jiffy. Six years later, we are still nowhere. But the billions have gone anyway. Ebonyi may wish to also learn from its neighbour, Enugu. AVOP Plc was forcefully taken over by the Enugu State government some 20 years ago because of this “my territory” issue. Where is AVOP vegetable oil today? Down the drain.
With the standstill and media war, I call on President Goodluck Jonathan to play the role of a statesman. He should call the combatants to a round table. I know there is a lot of bad blood already and hurtful words have been exchanged. But I have not seen or heard anything that is beyond redemption. A thriving cement factory in Ebonyi State and the South-east will do the economy no harm.
Turning 50 with 50 Budding Entrepreneurs
The day I turned 40, I was just lazing around the house, drinking ice tea and watching CNN. I won’t do that again. When I hit 50, I will do something more meaningful. Former chief executive of UBA Plc, Mr. Tony Elumelu (CON), turned 50 recently and I sent him a congratulatory SMS. We spoke later in the day, and I asked him if we were going to eat rice and chicken. He said no. He had marked his birthday quietly already – no big parties and loads of congratulatory adverts in the newspapers. Elumelu, who has been promoting entrepreneurship and philanthropy on the continent since his exit from the banking hall, played host to the CEOs of 50 fastest growing private (non-listed) companies in Nigeria, called Nigeria50.
The companies were announced at an awards ceremony at Eko Hotel on the eve of the entrepreneur’s birthday. All 50 companies broke records, with each growing at an average 100 per cent a year on revenues of $9 million. As a group, they have created 6,600 jobs, with huge potential for thousands more. The 50 recipients, standing proudly on stage that evening, offered a glimpse into the country’s vast potential for entrepreneurs. They are impacting the society, addressing problems from malnutrition to job creation and employee training. The man behind Nigeria50 is Elumelu – with his partner Allworld Network and the Tony Elumelu Foundation driving the process.
Speaking at the ceremony attended by over 350 entrepreneurs and business and government leaders including the Minister of Trade and Investment, Dr. Olusegun Aganga, and the famous Harvard Business School Professor and Chairman of AllWorld Network, Michael Porter, Elumelu said: “All 50 companies demonstrate Nigeria’s capacity for dynamic growth and investment. These are African entrepreneurs investing for the long term in Africa, driving Nigeria’s and Africa’s economic development – a key pillar of Africapitalism. They are showing that the private sector has what it takes to turn economies around dramatically.”
The 50 companies broke many records in relation to 15 other country rankings throughout the Middle East, Turkey and South Asia in terms of growth rates, the size of companies and diversity of industries. Many of the companies, founded in the last ten years, have already grown to be leaders in their industry. An average of only 46 years old, most Nigeria50 entrepreneurs plan to establish another company in the next two years. They believe that the opportunity of growth for them is within their own country. While some are looking to expand further into West Africa, the entrepreneurs see that Nigeria, with its population of 162 million, is the place to expand.
Happy birthday to Elumelu.