How Nigeria's Industry Policy Paved Way for Dangote, Not Others

Nigeria's backward integration policy was introduced in 2002 and operated through tariffs, levies and tax breaks. Backward integration means that rather than buying from outside, firms manufacture their own inputs. An example of this would be if sugar mills own sugarcane farms, they are said to have diversified through backward integration.

The policies were initially designed for cement and beverages. They were later extended to sugar, rice, tomato paste, automotive, oil, gas and textiles.

Africa's richest man, Aliko Dangote's Dangote Industries Limited, dominates the Nigerian cement market and is a key player in the rapidly expanding African cement business. The conglomerate has also expanded its manufacturing activities in a range of food processing industries such as sugar and salt. This expansion has made it the biggest group listed on the Nigerian Stock Exchange.

Dangote might be an example of a successful and dynamically expanding manufacturing firm in Nigeria. But structural transformation across the Nigerian economy remains very limited.

Chistina Wolf and Richard Itaman for The Conversation asks if the rise of Dangote's group is an illustration of a successful industrial policy?