Dangote Entry Economic Hiker
By Ernest Ndukong
The coming into the country of the richest man in Africa and his group, whose fortune surpasses US$ 13 billion, can, to some extent, be compared to Jesus’ triumphant entry into Jerusalem.
The Dangote Group plans to invest some US$ 700 million in Cameroon, starting with a FCFA 56 billion (US$ 115 million) worth cement project. The economic, political, social and reputational impact that the project(s) will have on this Central African nation and its people, cannot be gainsaid.
The ground-breaking project took three years to move from paper to the ground. This hitherto ‘invisible’ idea finally became tangible last September 19, with the signing of agreements between the parties concerned and the laying of the foundation stone of the cement factory in Douala, Cameroon’s economic capital.
The cement manufacturing plant is expected to be completed by mid 2013 after which there would be 1.5 million metric tons increase in cement in the country on a yearly basis. This capacity is only about six percent less than what the lone cement producing outfit CIMENCAM produces in a year.
Dangote Group will import 70 percent of clinker - the raw material for cement and the rest would come from within.
Cement Sufficiency
According to a release from the Ministry of Industry, Mines and Technological Development, the country’s demand for the bolster product is over 2.5 million tons a year. It is also stated that this consumption grows annually by about eight percent.
By 2014, CIMENCAM’s third plant is expected to be productive, producing over 600.000 tons of cement annually. This would mean about 3.7 million tons of cement would be available and demand should be at about 3.1 million tons, everything being equal.
The market implications when supply surpasses demand are enormous and beneficial, particularly to the consumers. The price must drop for equilibrium to be established. Consumers will then buy absolutely more with their available income. The effect of this on the beauty of our villages, towns and cities are equally going to be massive.
It is important to note that the price of local cement has doubled over the past decade. The fortifying substance averagely sells at FCFA 5.000 with a lot of black marketing involved.
The Government will reduce or stop importation of cement into the country since the need for more cement to satisfy national demand would no longer be. This would mean less money spent on importation, leading to a favourable Balance of Payment (BOP), which currently has a surplus of FCFA 114 billion.
Employment
It was common practice to see many people working on a particular task in industries and factories. With mechanisation and technological advancement, fewer persons are needed for work to be completed. Nonetheless, there would still be some employment of about 200 direct workers and several hundred indirect jobs created by the cement manufacturing plant.
This would be reflected in the lives of many other Cameroonians whose relatives are part of the multi-billion project. The dependency chain would be relaxed, shortened and made more beneficial and lucrative.
The per capita income of Cameroonians would witness an upsurge, thus, leading to a higher standard of living. The effects of an improved living standard will cut across the wealth and health of Cameroonians and would definitely increase the life expectancy ratio.
Reduced unemployment would result to fewer idle minds and fewer devilish thoughts. Our society would be worth emulating and Cameroon should become an emergent economy even before 2035.
The pumping of billions into a third world economy is just one way to transform it to a developed nation. More cash means more financial transactions, more spending, increased circulation of currency, improved economic and business activities, increased income and many more positive implications. Bailouts in the Euro zone are still fresh in our memories.
Exposure
Nigeria is Africa’s biggest economy and Dangote is Africa’s richest man. The coming of this duo to Cameroon would expose the country to other foreign investors. It is an undeniable fact that Dangote is renowned not only in Africa but in the world and the goodwill associated with such popularity cannot be easily valuated numerically.
Society harbour’s many Thomases who would love to see before believe. It is expected that in not too long a time, these Thomases would come knocking to invest in Cameroon.
Many other foreign investors from almost all continents are already in Cameroon. Cameroon has enormous potentials and raw materials of all types and only need harnessers who would transform these natural and man-made resources to semi-finished or finished products for local consumption at affordable rates.
This mouth-watering deal is anticipated to widen the relationship between the two countries that are, independently, power houses of their respective regions; CEMAC and ECOWAS. The average Nigerian is either a politician or a business mogul or both.
Diplomatically, the two nations would have set precedence for peace and reconciliation for others to imitate. Cameroon and Nigeria were in conflict for over a dozen years over the Bakassi peninsular which now belongs to the former, after years of deliberations at The Hague. It is unusual to have such international investment projects between nations formerly considered enemies. Africa, being the mother of civilisation, it is just but normal, because, there be no permanent enemies.
Dangote’s Other Interests
The Dangote Group operates in as many as ten other countries in Africa, including some of Africa’s biggest economies, and is involved in diversified manufacturing and distribution. Their products range from sugar and salt through flour, pasta, tomato and vegetable oil to telecommunications, port management and food processing, amongst others.
Cameroon and Cameroonians are stakeholders in all of these sectors in which the Dangote Group is operating at the moment in different countries. Surely, the remaining US$585 million to complete the projected US$ 700 million will be invested in some of the other products.
The sector it would eventually invest in is not more important than the more than quadruple impact it will have, compared to the US$ 115 million cement manufacturing plant project.
CIMENCAM’s Third Plant
Cimenteries du Cameroun (CIMENCAM) said, September 23, that it had started work on a third plant to cost about FCFA 50 billion to complete. Cameroon’s Minister for Industry, Badel Ndanga Ndinga, laid the foundation stone for the new plant which is expected to be producing 600.000 to 700.000 tons of cement each, year as from 2014.
With many cement producing plants or companies, competition will prevail and a producer will only make abnormal profits if the right product is sent to the market at the right time, in its right quantity and at the right price. Monopoly will be a thing of the past.
A school of thought argues that, instead of opening a new cement manufacturing plant, the already existing CIMENCAM, whose services leave much to be desired, should have been expanded and made more productive, capable of satisfying local and foreign demand.
It should be noted that Cameroon also supplies countries in the sub-region such as Chad, Central African Republic and Gabon and imports cement for local use.
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