Daily Trust (Abuja)

8 December 2012

Nigeria: Why Nigeria is Producing More Billionaires as the Poor Get Poorer

analysis

Photo: Leadership
Some of Nigeria's super rich.

Abuja/Zaria — The Nigeria's rich list is growing rapidly even as the country's poverty rate escalates. In this year's list of 40 African billionaires by Forbes magazine, 11 Nigerians were mentioned. This is even as many Nigerians blame government's pro-rich policies and anti-poor moves for the widening disparity between the rich and the poor. Weekly Trust reports

In the 2012 list of Africa's 40 billionaires compiled by the Forbes Magazine, Nigeria made a strong showing with more than one fourth of the names contained in the role, which had 12 South Africans. Nigeria was ahead of Egypt which had eight billionaires on the list and Morocco which had five. Angola, Tanzania, Kenya and Uganda had one each.

In a symbolic showing, the Africa billionaire list, a Nigerian billionaire Aliko Dangote came first just as his compatriot Hakeem Belo-Osagie closed the list. The only snag is that this is coming on the heel of rising poverty among Nigerians as indicated in the National Poverty Profile released by the National Bureau of Statistics.

But as the world celebrates the billionaires, the reactions in Nigeria is mixed, with many observers blaming the government of coming up with policies that make the rich richer just as they make the poor poorer. Instructively, six out of the 11 billionaires produced by Nigerians - Mike Adenuga, Folorunsho Alakija, Theophilus Danjuma, Mohammed Indimi, O.B. Lulu-Briggs and Sani Bello - have oil as one of their sources of income, while come combine oil and telecommunications as well as other self initiatives as the Forbes list shows.

Dangote, according to the Forbes list, made his billions mainly from businesses in cement, sugar and flour; so also is Abdulsamad Rabiu. Jim Ovia (banking), while Oba Otudeko (who has stakes in Airtel Nigeria) and Hakeem Belo-Osagie (Etisalat) have telecoms as their sources of billions.

Many observers however say that government policies favour the rich, just as they make the poor poorer. They say though oil accounts for majority of Nigeria's foreign earnings, a lot of billions are being lost to favoured businessmen who "cut corners and shortchange" the government with impunity.

Recently, the Nuhu Ribadu-led Petroleum Revenue Special Task Force (PRST) submitted its report to President Goodluck Jonathan where it said that Nigeria is losing billions of dollars every year through the use of "briefcase traders" in exporting crude oil and importation of refined petroleum products. Other probe committees have also exposed rot in the oil sector.

Government favouring the rich

In the words of Dr Bashir Kurfi, one of the most senior lecturers in the Department of Business Administration of the Ahmadu Bello University (ABU), Zaria, "Ordinarily, in a normal economy, there is no way where over 60 per cent of people in a given country are living at below poverty level and at the same time very few are among the richest in the continent and also to be among the first 100 or 200 hundred in the world."

He said what the domination of Nigerians on the Forbes list shows "is the level of monumental corruption in government," adding that "in a global economy, some of the richest people like Rupert Murdoch, he is into communication and everybody knows him in the news satellite channel like the CNN and others. This person in Mexico that is among the richest in the world he is also into telecommunication business. If you take Bill Gates, he is into computer business."

Dr Kurfi however said that in the case of Nigeria, "anyone that tells you he is one of the richest in the world; when you look at the source of his wealth you would find that it is linked with government. They have access to government resources like the case of Alakija who has an oil block. Even Dangote, he enjoys a lot of wavers from government and does a lot of deals with government.

"In the case of Malabo oil whereby an individual sold a hectare of a government oil plot at the cost of $1.1billion and the money credited to his account is something that is not done anywhere in the world. Nowhere in the world you do such a thing where a government property would be sold by an individual and the money goes to him, nowhere in the world that is done including Saudi Arabia. The entire oil wealth of Saudi Arabia belongs to the government of Saudi Arabia and by implication to the Saudi people."

He said "You know the recent saga of the fuel subsidy where it was discovered that different people have pocketed several billions. Before in Nigerian tradition, no individual can own an oil block. That was how many got their money."

Speaking with Weekly Trust, Mr Osita Okechukwu, who is the National Publicity Secretary of the Conference of Nigeria Political Parties (CNPP), decried the wide gap between the rich and the poor in Nigeria, blaming it on Peoples Democratic Party's (PDP) alleged philosophy and motto of 'food-is-ready and 'share-the-money' respectively.

Okechukwu says "less than .5 per cent rich people and 99.5 very poor Nigerians' are direct consequence of actions and inactions of PDP-led government over the last 13 years.

"Aliko Dangote was not worth $500 million in 1999. Again, most of those who are billionaires today made it to the top through true waivers and undue patronage of government. All of them claimed to be captains of industry, 19 per cent of them have no pure water factory. So the essence of calling themselves captains of industry is to struggle in the foreign exchange market of Nigeria."

"When Obasanjo left office in 2007, he left $27 billion in excess crude account. That money could have been used to give us critical infrastructure. If you engage $2 billion to extract electricity from Mambilla water, you will employ not less than a million people, both direct and part-time employment. If Obasanjo has used $10 billion for modern rail-line, it could have engaged over 10 million Nigerians in the rail-line construction only. When it starts running, it will engage a lot of people because each railway station is a new town.

"If they have used one billion to develop coal deposit in Enugu, Benue, Kogi and Gombe, it will not only produce electricity but it will engage over a million people.

Also speaking, an activist Odoh Diego Okenyodo says it was not surprising that Nigerians were named in the list of top forty billionaires in Africa. "It has not come as a surprise at all because government policies visions have been geared towards that. They want to create wealth but not eradicate poverty. Government has a clear agenda on its wealth creation but not poverty eradication. This is the reason wealth is concentrated on a select few and reflects on an increase in the GDP indicating that there is growth in the economy. But as the GDP increases so does poverty because you are taking money away from the bulk of the people.

The development communication practitioner said, "Also if you take an in-depth analysis of the situation you will find that the economic growth is poor. Nobody knew the Mrs. Alakija who is now the richest black woman or her fashion label as much as Remi Lagos' was known and successful. All we heard is that Alakija used to be a fashion designer and later became an oil magnet. There is hardly any widely known history of her business and her rise to the top."

For Yakubu Aliyu, a public affairs commentator based in Abuja, however, it would be wrong to blame government for the increase the nation is seeing in its billionaires. "Go to the records and read how Dangote made his money. He was very meticulous right from his early days. The last time, he was able to get a record loan from many Nigerian banks and they obliged him because they believed in his ability to repay. So instead of just sitting down in the comfort of our rooms castigating this people, let's use the chance we have to aspire to be like them if not surpass them."

What is the way out?

Kurfi said "The way out for Nigeria is for us Nigerians to rise up and ensure that those that have shortchanged government have returned their stolen wealth. That is when the poor would not be becoming poorer. When those stolen wealth are recovered, it is then that we can see if these so called rich people would compete to be among the richest in the world."

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