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Wednesday, April 25, 2012

OF CORRUPTION, BAD GOVERNANCE, AND ECONOMIC DEVELOPMENT


     According to the recent ranking by the transparency international, a corruption watch dog, Nigeria ranked at the bottom of the index. Corruption has become a feature and sort of hallmark to Nigeria. Since the returned to democracy in 1999 nothing has changed from the corrupt culture left by the military, if not the increases witness in its scope and dimensions. The military administration of General Ibrahim Badamasi Babangida (1985-1993) was accused among other things of stealing billions of dollars of extra revenue that accrued during the Gulf war of 1991, due to the high price of crude oil in the international market; not only that many analysts see Babangida as the person who formally institutionalized corruption as another pillar of government in Nigeria. Despite the rhetoric’s of his government of being responsible for initiating the privatisation program in the country as well as the move towards liberalization, the rate of corruption increased with his so called introduction of market policies into the economy. Babangida left government at a time when corruption has already become the norm and it was from there that Abacha government took over and further made our situation worst. According to Lawal (2007), “Corruption is worse in countries where institutions, such as the legislature and the judiciary are weak, where rule of law and adherence to formal rules are not rigorously observed, where political patronage is standard practice, where the independence and professionalism of the public sector has been eroded and where civil society lacks the means to bring public pressure to bear”. All the above listed features have manifested in Nigeria, it was just last week that a court in London found former Delta state governor James Ibori as culpable in cases of corruptions that amount to millions pound sterling. But, to the surprises of many in Nigeria, a particular court in Nigeria has before that time acquitted him of all charges, setting him free from all charges put against him by Economic and financial crimes commission (EFCC), the country’s corruption watch dog.  And just last month there were accusations and counter accusation between the Director General of Nigerian security and exchange commission (SEC) and the chairman of the house committee on capital market. While the chairman accused her of spending public money on dubious hotels bills and food expenses, the DG SEC in return accused the committee chairman of asking for bribe of millions of Naira.


    Another recent case of corruption is that of pension scam where billions of Naira that belongs to police pensioners and others were being stolen over many years by top civil servants that included secretaries of government ministries. Some of these stolen monies were hidden inside houses and others were transferred to accounts of unsuspecting civil servants. That is why it is not uncommon in Nigeria to see pensioners that put many years of work for the government begging on the street, because their entitlements are yet to be released. And the link between corruption and poverty can be directly observed here and not to talk of it connection with the high crime we see on the streets of Nigeria every day.  Therefore, it should not come as a surprise when you see police and other security agents collecting bribes on the road or security agents aiding thieves in their acts, because the act of corruption is condone at the highest level of authority. Former bosses of the police used to delay the payment of police salaries in order to earn undue interest on the money from banks where the money were being kept. How do you expect to achieve rapid infrastructural development in a country where contract for the building of roads, supply of electric power, pipe born water, and air port is inflated from the actual amounts? The direct implication of this is that a billion Naira ,means to built three roads can only build one, thereby reducing the rate of economic growth and development in that nation. That is why many see Nigeria’s target of becoming one of the 20 largest economies in the world by the year 2020 as just a dream which cannot be actualized without confronting corruption monster head on. In one of the House of Representative proves in to the power sector activities during the civilian regime of former leader Olusegun Obasanjo, it was discovered that about $16 billion were squandered on the power sector without any improvement on the level of power supply left behind at the time of handing over from the military. But, people in positions of authority that includes monarch, former leaders, and religious leaders were reported to be begging the House to shelve that plan of taking the matter further. 



    According to the late economic Guru, Professor Sam Aluko, there is a kind of positive correlation between corruption and the amount of income earned by individuals in Nigeria. As it appears the higher the income of a civil servant or politician, the more the amount of money he steals. The recent case of pensioners money and the current prove by the house into petroleum subsidy has further add credence to this theory, here in Nigeria.  Corruption also distribute income in favour of the corrupt class which in most cases they are already rich individuals (Aluko, 2008), thereby, increasing the incidence of poverty and wealth disparities. The recent data released by the national bureau of statistic that shows the percentage of people living in poverty has increased since the returned to democracy to about 70% 0f the population, under scoring the increase of corruption in the country despite the return to civilian rule. In the northern part of the country corruption is one of the major explanatory variables for the high incidence of corruption in the region, leaders with origin from the northern part of the country rule the country for about 65% of the country history since after independence from Britain in 1960 but have nothing to show for the development of their region but poverty. Even in the Niger delta, despite the trillions of Naira that the region is collecting annually there is no sign of infrastructural development as it should be. The region governors are one of the most corrupt in the country. The case of kidnapping for money ransom is one of the major problems that are militating against the development of that region and poverty and unemployment are some of the causes of that. Where you have government official telling the poor to sacrifice for the betterment of the country and in order for the future of the nation to be greener while on their part they are not forgoing their corrupt practices, then there is need for a bigger surgery. In the neighboring Niger republic despite their poverty the level of corruption there is not endemic as is the case with Nigeria, in which case some scholars like to link her deteriorating case of corruption to the legacy left behind by the British colonialist when they left the country in 1960.


    In a paper on good governance by Professor Sam Ejite O. (2007), he categorized Nigeria’s current problem of governance in four context, dictatorship and authoritarianism; weak constitutional institutions such as legislature, judiciary, and political parties; class character of the economy that allowed the use of stolen money to acquire power; and lastly, personal rule by those in power. The dominant political party in Nigeria, which promised to rule the country for 60 years, the People Democratic Party (PDP) symbolized anything that is dictatorship and authoritarianism. Since, 2003 general election PDP rigged every election to ensure that it maintain it stay in power. Obasanjo, who rule the country between 1999 to 2007, has never embraced true democracy (he remain the military man that he was before his retirement). It is an open secrete that the old man tried to extend his tenure by looking for ways to amend the constitution to allow him go for third term. In a country where the judiciary has fallen victim of executive dictatorship, and the opposition parties are weak not much should be expected in the way of fighting corruption. The Nigerian judiciary behaves as if it is another arm of the PDP always dancing to her tunes. PDP and its people are the only politicians with large chunk of money at their disposal, apart from few opposition politicians in alliance with the party. It is therefore, not surprising if PDP uses it stolen money to rig election at all cost. While Nigeria’s Africa main rival, South Africa, can boast of less corruption and poverty stricken families, Nigeria boast of them. It is, therefore, clear that any forecasting on the future economic progress of Nigeria that did not take the negative impact corruption and bad governance have on the future growth, will therefore fail to arrive at the realistic future growth and development of the nation.

   

REFERENCE

Aluko S.A. (2008), “corruption and national development”, A lecture delivered at the centre for democratic development research and training, Zaria Kaduna state, on Saturday 31st May, 2008.

Lawal G. (2007), “Corruption and development in Africa: challenges for political and economic change”, Humanities and social sciences Journal 2(1), 2007

Oyovbaire, S.E. (2007), “the crisis of governance in Nigeria”, convocation lecture, University of Port Harcourt, Thursday 15th March, 2007

Tuesday, April 24, 2012

A ROAD SIDE MARKET CALLED NIGERIAN REAL ESTATE INDUSTRY


        It was after reading Robert Kiyosaki book ‘Retiring young Retiring rich’ that I decided to explore the vast and unorganized real estate market of Nigeria which has continued to growth despite the slow growth in the Nigerian financial market. Nigerian economy to start with is one of the fastest growing in the world; it was recently ranked the third fastest growing economy in the world. The continue grow in the economy has left people with a lot of liquidity which they needed to invest  some where, and looking at the slow recovery experienced in the financial market after the last global financial crisis, real estate is one of the safest investments in Nigeria for one to put his hard earn money. But unlike the mortgage market in the United States that was at the center of the last global financial crisis, the Nigeria real estate sector is not very much connected to financial sector. The amount of capital that bank borrowed out to finance the real estate sector is not very significant. As it was seen during the last crisis, the major contributing factor to Nigeria finding herself in that crisis were loans given to finance purchases of shares (margin loan), credit extended to finance the importation of refine petroleum by oil marketers (in short, bad loans to sectors other than the real estate sector), poor corporate governance record of the Nigerian banks, and transmissions from the world wide crisis that emanated from the wall street. During that time it was real estate that came to the rescue of many Nigerian investors, forcing the price of assets in the market to go down as a result of too much liquidity. While in developed countries, housing wealth constitutes about 70% of the nation’s economic wealth the story is not the same in here, Nigerian housing sector has been neglected by the government. And, the private sector is still not ready to tap into the enormous wealth that is buried in the sector. At the centre of Nigeria’s current poor development of the real estate sector is the present of weak judicial system, absence of land right markets, lack of mortgage financing infrastructures, government neglect, and lack of awareness.
    One of the major factors that is mitigating against the development of real estate and mortgage finance in Nigeria is lack of land titles. Up till this time, despite the land reform act, a lot of land dealings are done outside the formal channel of Government who is charged with the responsibility of Issuing land titles to prospecting land owners. That is why it is difficult to obtained loan from banks by using a land certificate from say, Bauchi or Sokoto, here in the north. Most land certificates holders from the Northern part of the country with the exception of Abuja and some parts of Kano and Kaduna find it very difficult to scale through with their proposals before any credit committee of Nigerian banks. There is the problem of traditional land owners, like famers in Northern Nigeria, who divided their farm lands into pieces and sale to the public without government approval. And most governments in the North are not doing much to address this problem, instead they are busy aiding the problem by refusing to develop effective town planning schemes and make ownership of land title easier. In the south it is only Port Harcourt and Lagos that have growing real estate industry that allowed for large scale commercial investment. In Lagos, real estate is one of the major movers of the economy of Lagos, and it is easier to obtain a loan using land title from Lagos than any where in the country with the exception of Abuja. That explain the scale at which large scale commercial estate developers are entering the Lagos market; newly build estates are springing g up in Lagos from areas of land that were before used as bush or farm land. Just like in other developed climes, Lagos state is currently reclaiming some part of the ocean to add to it most expensive parts of the commercial city such as Victoria Island, in what is estimated to cost billions of dollars and the phase of the work has already reached an advance stage, being undertaken by one of the biggest firms in the business in the world. The reclaimed area is name Eco Atlantic City and the hope of the developers is to develop it into the new financial epicenter of West Africa with some of the tallest buildings you can find anywhere in Africa and beautiful streets. It is expected that it will provide accommodations and work space for about 25 million people by the year 2015.
      There are only one or two listed companies that are in the real estate business, all though recently I have seen some companies coming out with their public offering asking the public to buy into their company shares, the proceed of which will be invested in real estate businesses, the market is still yet to take up looking at the potentials on the ground. The housing deficit in Nigeria is very huge and any body who can do careful study of the environment and invest tactically will make a lot of money. Governments in both state and federal level are not doing much to address the housing deficit in the country; all the talks about building 10,000, 20,000, or 50,000 houses before this or that year are mere political campaigns, uttered during political rallies in order to get votes. Recently, the head of service of the federation Ms Ama Pepple was quoted to have said that government will require a minimum of N60 trillion to provide the 17 million new housing unit in order to addressed the current deficit. This is to tell you how large the current deficit is and like many professionals have argued government alone cannot handle this without the involvement of the private sector. Of private Mortgage banks that are actively in the sector I know of Aso loans and Saving because of numerous project I have seen them financing in Kano and Abuja. Aso savings was incorporated in 1995 as a primary mortgage institution with majority shareholding by government which it later sold to the public. The mortgage institution was later listed on the floor of the Nigerian stock exchange on April 25, 2008. It was responsible for the development of about five housing estates in Abuja and it has operations in Lagos, Rivers, Ondo and Niger among other places. Another mortgage institution that is quoted on the Nigerian stock exchange is Resort Savings and Loans Plc with its headquarters located in Lagos; it has over 18 years of mortgage business experience. Because of it concentration and focus in Lagos its does a lot of its businesses their and Abuja. At the state level you have institutions like the Dala building society that is based in Kano who help individuals acquire their personal houses.

Friday, April 20, 2012

INFLATION, UNEMPLOYMENT, GROWTH AND EXCHANGE RATE IN NIGERIA: RECENT DEVELOPMENTS


       Some few days back, the Jeddah based Islamic Development Bank in one of its releases ranked Nigerian economy as third fastest growing in the world after that of China (98.4%) and Mongolia (14.9%) with rate of grow of 7.68%; these figures has further cemented what other development institutions and economic agencies have reported earlier about Nigerian economy and its potentials.   With population of about 170 million people, Nigeria’s domestic sector continues to growth despite the challenges of insecurity and poor infrastructures. The highest contributors to this grow are the manufacturing, construction, telecommunication, and services who have over the last one year continue to absorbed more capital and labour as they churn out higher output and services. By no means insignificant in this growth is the contribution of agricultural sector which grow continuously despite government neglect of the sector over the years. But, these growth figures, notwithstanding, the number of poor people in the economy refuse to come down despite government mantra about fighting poverty and unemployment since the coming of this administration over two years ago. Conventional method of fighting poverty has done little to reduce poverty even in more serious clime where the government implement budget religiously, not to talk of Nigeria that has serious problem with corruption and poor governance record. Recently, top official of federal government were found wanting on the case of corruption where billions of Naira of pensioners money were stolen by crook government officials in collaboration with official of some financial institutions. Currently, the senate in Abuja is investigating the matter; and economic and financial crime commission has already wed into the issue. In a release this week, the world bank observed that the percentage of poor people in the developing countries continue to remain high, the report observed that about 60% of the population in the developing world and nearly 80% in the poorest countries lack effective safety net.
     The dwindling reserve in the excess crude account has reached a point of concerned that recently the Minister of finance Ngozi Okonjo-Iweala has raised the alarm on the possibility of Nigeria going bankrupt. This is happening when the total earning from the exportation of petroleum continue to increase (daily output stood at 2.5 million barrel per day), raising the question of what is really happening to the billions of dollars that the nation earn. Are all these money going to the so called fuel subsidy too, or is it the cabal that took all these money? Nigerian economy still depends substantially on imported (refine) fuel to power its vehicles and machines. What a shame! All the clamor for the establishment of sovereign wealth fund to manage excess fund has gone into the thin air, becoming a victim of among other things subsidy cabal, state governors opposition to it, and other wastages. With inflation rate falling to about 11% from the January high of about 12% the economy remain heated causing more frictions than expected earlier. The cost of consumer goods and other necessity has not show any significant change from their sudden jack during January fuel price increase. While inflation remain high (which according to conventional theory the rate of unemployment would have already been down with this inflation) the rate of unemployment in the economy remain high at about 25% (according the official figures which in reality must have been higher than that) despite government numerous promises to reduces it before the end of last year. The Nigeria’s external reserve has remain at around $36 billions, unable to move to its last two years point of about $45 billion, these among many other things can be attributed to wastefulness of our governments both at federal and state levels. This year annual budget of 4.7 trillion Naira is the highest in the history of Nigerian government and much of it is going to the so called fuel subsidy.
       In bureau de changes around Nigeria, a Dollar sold for 158 Naira and about 156 in the official market; as expected numerous factors contributed to the deteriorating exchange rate of Naira against other world major currencies that includes declining foreign reserve, absence of conducive economic environment in the country, and happenings in the global economy. As usual domestic producers continue to complain about the cost of Dollar, that it is seriously affecting their domestic productions. But, for the cost of Dollar to come down in an economy such as that of Nigeria domestic infrastructures most be strengthen first. It is only after the resulting increase in export and reduction in import of that measure that the cost of Dollar will fall to the favourable level request by domestic producers. Though, Nigerian economy will continue to growth in the foreseeable future as it move to surpass South Africa as Africa biggest economy, the challenges and obstacles on the way to achieving that are numerous. Of no small importance is security challenges that continue to remain the major obstacle to the nation growth. But, of more organic significant is corruption that has affected almost all the sectors of the economy, more especially the public sector where rent seeking is the order of the day. These challenges, notwithstanding, Nigeria will continue to attract foreign investment taking into consideration the large market within its borders, abundant human and material resources, and foreign investors desire to diversify their portfolio.

    

Tuesday, April 17, 2012

BUILDING BUSINESS EMPIRES: Lessons from Kano’s major business families


Kano is known around the world as a major commercial centre in West Africa with histories dating back to the past 1000 years; Kano is believed to have been established in the year 999. Centuries of business activities have made Kano very distinct around its numerous neighbours, as a market place, in fact everything in Kano is sale-able and every inch of a space around the city is a potential market place. That explained the attraction of Kano to other migrants from around the world and the reason why inside the ancient Kano city you find people who trace their ancestral roots to as far away places as Yemen, Syria, Mali, Libya, Senegal, Ethiopia, Sudan, Burkina Faso etc. Writing on the success of Kano as a commercial centre Ibrahim Ado Kurawa (2006) observes,The Jihad leaders of the caliphate encouraged Kola nut trade and Kano was the greatest beneficiary with an annual turnover of about $30 million. Kano merchants were also very innovative and they were able to integrate commerce and craft industry during the precolonial Kano, contributed to the prosperity of the province. Kano was producing an estimated 10 million pairs of sandals during that period because of economic harmony. Sarkin Kano Alhaji Muhammadu Sanusi (1953-1963) established the Bompai Industrial Estate”.  At the centre of Kano success as centre of commerce, is the role played by its rulers to ensure the sustenance of the land as trading point for the region. Even with the Jihad of Usman Dan Fodio, Kano remains the most successful and rich of all the provinces in the caliphate.
      Kano is full of markets that attract hundreds of visitors from neighboring countries such as Niger, Burkina Faso, Chad, Cameroun, central Africa republic, Benin and Togo on daily basis. The major occupation of Kano resident remains trading, which explain the reason why Kano continues to produce some of the most successful business individuals in the country. One of the oldest market place in west Africa that is still existing till today, the Kurmi market (established by the emir of Kano Muhammadu Rumfa in 16th century CE), still retains it old friendly atmosphere, candor and attraction; other major markets in Kano includes Dawanau grain market (the largest in West Africa), Sabon Gari market, Singer market, Rimi market, Kofar Ruwa, Kantin Kwari, to mention just a few. Kano has a sizeable number of industries in the country, the largest outside Lagos. According to a Kano state document (K-SEED, 2004), the Kantin Kwari textile market alone, in around 2004 was valued at around N20 Billion worth. This article will attempt to look at some of the most successful business dynasties in the ancient city, though, the problem with this area of study is that there are few works done in this area by the business scholars; the articles made use of the few material at the disposal of the author, his personal knowledge and interview with more knowledgeable members of Kano business community.
      Agalawa remain the most business conscious group in the entire Hausa land, before and after the jihad of Usman Dan Fodio. According to some scholars, their origin is linked to the Tamashek speaking people of the Sahara desert; though, they are more concentrated in Kano they were found in Katsina, Borno and other parts of the Hausa land. According to Dan Asabe (1995), the patronage, encouragement, and protection given to Agalawa by the emirs and rulers of Sokoto caliphate help a lot in the success of their businesses. Prominent examples of successful Kano businessmen with Agalawa origin includes, Kundila (d. 1901),Umaru Sharubutu (d. 1944), Adamu Jakada (d. 1942), Maikano Agogo (d. 1946), Alhassan Dantata (d. 1955),and Iliasu Dandagomba (d. 1952). On their habit, Dan Asabe (1995), wrote: “But they remained largely endogamous, and thus because of this, they were in any particular area almost all related to one another. They were unostentatious, frugal and in most cases ate only once a day - usually a late evening meal. They maintained friendly relations with local rulers and attempted to avoid confrontations with them. They regard long-distance trade as their natural way of life and indeed, almost as a religious obligation. They rightly argued that the prophet Muhammad and all his close companions were, by profession long-distance traders”. They were said to have learned their business skills by starting as apprentice and in the process moving from market to market, house to house selling goods. Traditional Agalawa businessmen move a lot together with their families on trading expedition as if they were some kind of nomadic people. The Business families discusses below, with the exception of Isyaka Rabiu, trace their root to Agalawa people.

Dantata family
       Dantata remain the main name when you are talking of wealth in Kano land. Alhassan Dantata is the patriarch of the Dantata family who died in the year 1955. He was reported to be the wealthiest person in West Africa who first specialized in Kola nuts trade before branching into other trades. Dantata moved to Ghana from Kano during his early life where he started his Kola nut trade at Gonja, it was from there that, in later years, Dantata started moving Kola from Ghana to Nigeria. After he must have become famous with diversification into other businesses, Dantata became a major agent for Royal Niger Company in the North in charge of groundnut trade. Dantata is one of the famous examples of Agalawa clan known in Northern Nigeria for their business exploits. He is the major known survivor of the clan that went into oblivion with the coming of European and their modern businesses. Dantata is a very devout Muslim who did not received interest on his money and has visited Mecca for Hajj. He is said to be very discipline and avoid taking part in politics despite his connection to those in power. Sanusi Dantata is one of the most well known children of Alhassan Dantata who become famous with his continuation with his father groundnut trade. Generally, the Dantatas are known for their system of credit allocation through the family line, it was through one of these credits that Dangote received one of his initial starting capitals around 1977 from Sanusi Dantata who is his grand father from the part of his mother Mariya Sanusi Dantata. Through the use of agents dispersed in various town and rural areas Sanusi Dantata and his brother Aminu bought agricultural commodities and livestock from the rural areas and kept them in major ware houses located in the town. The late Abdulkadir Dantata is the eldest son of Sanusi Dantata who apart from his traditional merchandise trading and importation, established Dantata & Sawoe one of the biggest construction firms in Nigeria. Abdulkadir Dantata was last year listed among the forty richest Africans and was on the inaugural list of 40 wealthiest African this year by Forbes magazine.
    Aminu Dantata who i had mentioned earlier is the richest son (immediate) of Alhassan Dantata alive today. Born in 1931, Aminu like his brother started in the family business before moving into administration with the creation of Kano state where he became commissioner of commerce. He later left government and went back to his family business where he actively participated in the establishment of industries in Kano state at that period. Apart from establishing and buying shares of newly created industries in Kano, Aminu engages in the importation business, where he was very active in the importation and the distribution of fertilizer, cement, chemicals, building materials, and automobiles. Aminu is director in over 21 companies among which is the recently established Jaiz bank, a non interest Islamic bank. Unlike the like of Dangote, Aminu Dantata is highly conservative businessman who has substantial number of his investments closer to home. He is very active in real estate business where he owns a lot of properties in Kano. Aminu like his father spend a lot of his wealth in philanthropic work, currently he is the chancellor of Katsina Islamic university. Tajuddeen Dantata is son to Aminu Dantata who is also very active in the family business, as he manages million dollars of his own and father’s wealth. Unlike his father Aminu Dantata, Tajuddeen received conventional business education both in Nigeria, United Kingdom, Saudi Arabia, and Egypt. He is currently on the board of many Nigeria firms where his family have substantial interest; and with the help of his family business and connections he is proven to be an upcoming billionaire coming from the Dantata family. Alhaji Sayyu Dantata who is mechanical engineer by training was once head of Dangote transport section before moving into his own business with the establishment of MRS one of Nigeria’s major oil companies’ .With the acquisition of Texaco/Chevron Nigeria limited by MRS, Sayyu Dantata is considered one of the richest up coming billionaires in Nigeria and major oil player. Like Tajuddeen Dantata, Sayyu business approach is modernistic. 

The empire build by Dangote
    Aliko Dangote is currently one of the most flying faces of Africa who has caved his own niche  among the club of world richest Billionaires, with over $11 billion in net wealth; Dangote is the richest African alive and the only Kano and Nigerian businessman to ever attain such a feat. Born to the family of Dangote on the side of his father and Dantata on the side of his mother, Dangote received both conventional and Islamic education. With degree in Business administration from a university in Egypt, Dangote is a classic example of some one who combines both the traditional family business skill with the modern one.  Like most other Kano businessmen that come from business oriented families, Dangote cut his teeth in the family business from where he branched out to set up on his won with a loan from his grand father which he judiciously utilized to become what he is today. Starting as a trader who import commodities from outside the country in 1977, Dangote succeeded in building the largest business conglomerate in the country, that manufacture everything from cement, sugar, flour, noodles, juice, Textile, sacks, to iron and steel. Like his great grand father the famous Alhassan Dantata who was the richest person of his time and the most daring and adventurous of his time who went to other businesses that most business individual avoided, Dangote has become a modern Ba’agale (from Agalawa) who through his investments traverse the whole continent of Africa in search of profit. Currently, Dangote is investing billions of Dollars in other African countries to shore up his empires in Sugar and cement business. Dangote cement is today the biggest cement company in Africa with over $11 billion capitalisation and is planning on listing its shares on the London stock exchange sometime next year. Like with all major business individuals around the world, Dangote is broad minded and can adopt to new environment fast, a good example is his second home Lagos which has now become his first home, he has become a Lagosian- he is at home there since he first moved in about 35 years ago.
       Dangote is very ambitious individual recently he was quoted as saying he hopes to become the fifth richest individual in the world with the listings of his company on the London stock exchange next year. This is belief to be one of the major drive behind his continue acquisition of assets around Africa. Like most family business, Dangote group (his major company) has presence of sizeable number of his family members and close relatives in his empire, with the exception of sensitive managerial position where he employed a lot of expatriates from abroad. Famous among his family members that feature regularly in Dangote business is Sani Dangote who is the group vice president of the Dangote group.  He himself is an established business individual with interest in manufacturing, agriculture, banking, and oil services. He is junior brother to Dangote. Dangote group has about 13 subsidiaries spreading all over Nigeria and operations in about 14 African countries. Unlike Agalawa who made Kano the centre of their universe, today, the focal point of Dangote operations reside in Lagos where his headquarters and major companies are located. Apart from Lagos, other major Nigerian states have substantial number of Dangote businesses, like Kano (Textile, flour mills, Noodles, sack, and beverages), Benue (cement), Ogun (cement), Rivers (cement terminals), Adamawa (sugar), Cross rivers (flour mills), and Kwara (Flour mills).  Like earlier Agalawa who quickly developed a good rapport with the rulers of their period from the Sultan of Sokoto to the emir of Kano, Dangote has cemented a solid relationship between himself and the power that be, whether in Abuja, Lagos or in Kano. But, unlike some Agalawa businessmen who cannot adapted to the fast changes that are taking place in their business environment with the coming of the Europeans, Dangote is quick to adapt to changing circumstances as provided by the modern world. As Dangote aspire to be among the top five richest individuals in the world, it is possible that the centre of his activities may move from Lagos to either London or New York as it happened with many Billionaires of his reckoning. 

Khalifa Isyaka Rabiu and his children
  The family of Khalifa Isyaka Rabiu is one of the most famous business families in modern day Kano, he and his children run Business Empire that run into billions of dollars and is considered as one of the richest families in the state and the nation at large. Born in 1928 Isyaka Rabiu grew up in a family with tradition of scholarship (his father is a great Islamic scholar); he, too, become very vast in Islamic scholarship before turning his attention to commerce in the 1960s. The discipline he acquired during his learning period as Islamic knowledge seeker is belief to have helped him built his business acumen and skills. His networking abilities see him establishing a business contact with long established Kano businessmen (such as Alhaji Ibrahim Gashash) and prominent corporate agencies and government officials. Isyaka Rabiu has the vision and optimism to see things coming and where next business opportunity is going to come. For example, during the 60s and 70s he transformed himself from textile merchant to textile manufacturer by establishing his own company. The oil boom of the 1970s left Nigerian economy with abundant liquidity of cash and therefore higher purchasing power, Isyaka Rabiu was not blind to this opportunity; he actively participated in the importation of commodities of that era. This together with the indigenisation policy of that era, that saw Rabiu buying shares of formerly foreign own companies, help in making Isyaka Rabiu one of the richest men of that era. Apart from trading and manufacturing Rabiu engaged actively in real estate business and construction. Despite his image as a scholarly person, to many people especially in Kano he was viewed as a cut throat businessman like most other business personalities in Kano. He competed to get what he want in the business world of that period and does not fear any other competitor.  
     Most famous among the children of Isyaka Rabiu is Abdussamad Rabiu, the chief executive officer of BUA conglomerate one of Nigeria’s leading companies. Abdussamad received his conventional education both in Nigeria and the United State, apart from the Islamic education he received during his youthful age. The enormous goodwill gathered by his father during all those years in business and the huge empire he built has a great impact on the up bringing of Abdussamad and his growing up to be an important business personality in the country. As a very disciplinary person the older Rabiu made sure he transmitted the same disciplinary culture on Abdussamad and made him to take business with the most uttermost seriousness; and as a profession for living. He started his BUA Company in the late 80s as a trading company that specialised in the importation of agricultural commodities and chemicals, iron and steel and industrial chemicals. Like it is the tradition with most Kano businessmen, he too started as a trader and importer before moving into real manufacturing. Unlike his father who is educated in the Islamic knowledge, Abdussamad like many modern Nigerian businessmen is equipped with modern education, that took him to America where he studies Economics. Thus, Abdussamad is versatile in both the modern and Kano traditional business skill that request some one to move a lot from one part of the world to another. Then there is excessive desire to acquire wealth which is common with all Kano businessmen, that motivate businessmen to any length allowed by law to acquire wealth.  With the return to democracy in 1999 and large scale privatisation of government own enterprises by the Nigerian government, Abdussamad wedded in and buy substantial interest in many companies among which are Sokoto cement, Delta steel company, ports, Lafiagi sugar company, and Edo cement company. So far Abdussamad has turned some of these companies into world class business, away from the moribund businesses that they were under state management. Other manufacturing business that he is currently doing well in includes, flour and oil milling, pasta production, oil and gas, shipping, and real estate.

Conclusion
  One of the major conclusions that can be observed in this piece is the Kano tycoons’ obsession with building conglomerate instead of Anglo-Saxon specialized businesses. This is due to many factors among which are the environment they are doing their businesses, family tradition and the desire to growth wealth in such a short span of time. They are very conservative as they hardly go into business areas prohibited by their religion with the exception of few with investments in modern interest base banking system. To them business profession is like a religion- they followed the rule to the end and do not joke with business deals. The children of the founders of these family businesses unlike their parents have acquired a lot of Western education and business skills.

                                                   REFERENCE      
Ado-Kurawa, I. (2006), “Investment opportunities in Kano: the centre of        commerce”, Research and documentation directorate, Kano state government
Kano state economic empowerment and development strategy (K-SEED), September 2004

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Wednesday, April 4, 2012

NGOZI AND THE CHALLENGE OF BECOMING AFRICA FIRST WORLD BANK PRESIDENT



        In recent time Ngozi Okonjo-Iweala, the current Nigeria’s minister of finance, has continued on the path of boosting her public profile since her first appointment as minister of finance during the tenure of former Nigerian president Olusegun Obasanjo. Madam Ngozi is now in a league of her own, considered as one of Africa’s great women who are few in number in the whole continent. Like the current Managing Director of International Monetary Fund (IMF) Christine Lagarde who herself was a former finance minister of France and an acquaintance of Ngozi, the iron lady aspiration to become the president of the Bank is based on her past track record as a technocrat with many years of experience working for the World Bank and as a former finance and foreign affairs minister. Ngozi first appointment as minister of finance during the tenure of Obasanjo was credited with securing debt relief of about $18 billion for the country in addition to her record in bringing about some level of discipline to Nigeria’s unruly finance ministry.  It was also to her credit that Ngozi help to fight the bureaucracy that had bedeviled the ministry for many years. Though, her other image in the Nigerian public mind as a woman who spear headed the introduction of tough economic measures such as this year removal of subsidy is another pointer to the kind of programs to expect in the event she win the chair. Being the only woman contesting against two powerful men, the contest is not going to be easy considering the fact that one of the candidates was nominated by the United States, with more voting power than any other country in the World. The fact that Europe may likely support the candidate put forward by the US in order for the US to back her own candidate when it comes to the managing Directorship of the International Monetary Fund (IMF), is another stumbling block to her candidacy.
   Ngozi and those that are pushing for her candidacy are of the opinion that the woman is there to champion the cause of African countries or rather to champion the cause of development economics, where many critics argued the multinational institution has done little to address. For example, in the almost six decade history of the institution the body has done little to reduce chronic poverty that has destroyed many families in Africa, Asia, and Latin America, instead focusing on text book prescriptions designed by some arm chair academicians in various research centers and universities. If not in the last one decade the programs of the bank had focused on given loan to countries to finance the building of white elephant projects that do little to help the situation of the poor. It was in the last decade that the bank began to move its focus from the financing of such huge budget projects to soft issues like micro financing, HIV/AIDS, and provision of other supports directly to the poor. But, Ngozi as some one who has spent all her working career in the World Bank under the same tradition and leadership, her critics argued is least qualified to tackle such problems; that is why some of these critics see the candidacy of Kim who came from a more poor focus development background, with many years of experience working directly with the poor, as providing more lunching pad for orienting the bank towards addressing the problems of developing countries. But, Ngozi plus including the fact that she herself came from a poor  country and continent with millions  poor families in need of the assistance of the bank, and her work experience as finance minister of Nigeria afforded her with the opportunity to work directly in a poverty ravage country. Though, Ngozi first appointment as finance minister did little to address the plight of the Nigeria poor, she has done many things in indirect way to help the poor like her initiating of programs to generate jobs and fight poverty.
    Already, such mainstream economic and financial papers such as The Economist and Financial times of London, New York Times have endorsed her candidacy, but this is another pointer to the direction of things to come in the event that Madam Ngozi win the chair. The fact that such papers are hard line capitalists and advocates of text book economic prescriptions of the neo classical school of thought, explained their support for her as against Kim. Hence, some critics argued that her election is simply not more than going back to the status quo. But, to me even the candidacy of Kim as endorsed by the US will not amount to much; as the country with more voting and controlling power in the institution and one who produced her presidents since the creation of the institution in the 1940s US is to blame for all the bank lack of concern for the World poor in all these years. The one who’s candidacy will have mean something to the poor professor Jeffrey Sachs could not get the endorsement of the authorities in the white house, hence his failure to make the short list. But, Ngozi has other things working for her, the fact that she is the only female contesting for the post and the record of other female that hold other executive post around the world will help boost her candidacy. There is this almost  general opinion that female are less corrupt compare to their male counterpart and the fact that women and children made up the largest share of the world poor, Ngozi candidacy is a representation of that segment of the world population. Her CV is as vast as that of any other candidate or even more, with fine educational qualifications and work experience, her current post in the ministry of finance as a super minister point to the fact that Ngozi is a super woman and workaholic.