David Piling did a Lunch With The FT with Aliko Dangote. I was so vexed I did a thread response to him on twitter.

But there is something else worth discussing here. Dangote made a comment when talking about economic policy that is seriously worth unpacking. In talking about the usual import vs local production whatever, he said the following:

“What Nigeria needs is to produce locally what we can produce locally,” Dangote says, nibbling at a skewered satay, and defending the thinking that has made him rich. “Nigeria still imports vegetable oil, which makes no sense. Nigeria still imports 4.9m tonnes of wheat, which does not make sense. Nigeria still imports 97 or 98 per cent of the milk that we consume.” Of the latter (astonishing, considering the country’s roughly 20m cows), he says, “The government needs to bring out a draconian policy to stop people importing milk, just like they did with cement.”

Read those comments very well — they spell the fundamental challenge facing the Nigerian economy and why it is not working for the vast majority of Nigerians who are born into poverty, live in poverty, die in poverty and pass on the same poverty to their children.

Poverty is not just about what you earn it is also about what you pay. The worst combination is to be poor in what you earn and poor as a result of what you pay. This is one of the things killing Nigeria and turning the country into a poverty factory. Nigerians earn low wages but that in itself is not the end of the world — nobody expects Nigerians to earn the same as Americans. The killer is what Nigerians pay for the basics of life. And time and time and time again, Nigerians pay a lot more because of government policies.

They are planning for you

Dangote starts his comment by saying Nigeria should produce locally what it can produce locally. No reasonable person can ever argue with that. But the moment he starts saying importing something does not make sense, that is when you should be wary. As we used to say when we were growing up — he is planning for you. And the plan is not a good plan.
Think of all the problems with producing milk in Nigeria today — poor cow breeds, medieval practices such as trekking for miles upon miles with tired and impoverished looking animals, cows that only eat what they see on the road or on someone’s farm as opposed to being served a diet like elsewhere, lack of expertise and various other things. You can still produce milk in Nigeria even with all those problems but every single one of those problems is a cost. You can produce milk with a cow that has trekked from Port Harcourt to Potiskum but that milk will cost more because it will only produce a little. Imagine you need N5,000 to survive for a month and you have one cow as your only source of income. If that cow produces 5 litres of milk in a month, you have to sell each litre for N1,000 to survive. If it produces 100 litres of milk, you can sell the milk for N50 per litre to survive. This is a gross simplification but this is the general idea of productivity and how it helps to bring prices down.
Aliko Dangote has not said a word about all the problems with cows that makes Nigerian milk so expensive. He skipped all those and jumped straight to ‘draconian policy to stop people importing milk’. Of course if you put out a ‘draconian’ milk ban today, milk will be produced in Nigeria but it will be produced at the Nigerian price, inclusive of all those problems affecting Nigerian cows. On top of all those problems and costs, a profit margin will be added because this is not charity. There are no two ways about it — Nigerians will pay A LOT more for their milk if such a ban comes into place.

Those words Dangote uttered are a play for the money in your pocket. The moment you are left with no option but to buy the Nigerian milk, you must part with the money in your pocket and hand it to Dangote or whoever is the beneficiary of the milk policy. You WILL be poorer. Whatever you are paying for milk today, you WILL pay more after the ‘draconian’ ban. I repeat — You WILL be poorer. Dangote is planning for you. And crucially, the incentive to solve all those problems that were there before the ban will now be reduced. Afterall, problem or no problem, the milk will be sold at a profit. This is why Dangote himself is moving his cement all around the country inefficiently with trucks and does not innovate. Why should he? The thing has a 47% profit margin as he himself said in the interview.
You cannot win this fight to protect the money in your pocket because Dangote has the ears of the government and nobody is fighting for you in Aso Rock to keep your costs down. The only people the government listens to is people like Dangote. You WILL be poorer.

Policy for me, Poverty for you

Again — poverty is not just about what you earn, it is also about what you pay. Unless your income goes up, if you start paying more for the same product, you will be poorer. I have written ‘severally’ about this using rice as the example. Nigerians did not get a pay rise from anywhere in the last couple of years but in the name of local rice production, government and farmers entered into a conspiracy and made Nigerians poorer through higher rice prices. Well, the income of the farmers went up but Nigerians as a whole became poorer. You cannot turn around and complain about Nigeria being ranked as the poverty capital of the world when you make their food more expensive deliberately. It is the logical consequence of the policy. It is also the same thing with cement that made Dangote rich.
This is why he is ‘a billionaire 14 times over’ and Nigeria has a 17 million housing deficit and poor infrastructure. The problem that cement is supposed to solve is right there staring us in the face but someone has still become a billionaire from it. The guy who is selling his 5 litres of milk for N1,000 per litre is also surviving but as he’s selling only 5 litres, a lot of people are obviously not drinking milk. So the problems that milk is supposed to solve like strong bones will remain but someone is making money from selling milk.

https://aguntasolo.co/dangote-wants-you-to-be-poor-1ab599da370e

The suggestions on the ban of imported milk has been a subject of debate for over 4 years now .There were arguments on including it in the 2015 ban .....don't feed Nigerians with cock and bull story....before someone says that they're helping dangote to build a monopolistic business

Did the government stop you from setting up your own dairy ?

I thought you guys always boasted about competing.

Chest beaters.

The "ban" on the importation of milk is going to ruin the milk industry. Million of Nigerians are either directly or indirectly dependent on imported milk and will impoverish them.

Also, as the author has mentioned, it will lead to Nigerians paying higher prices for this basic product.

I see chronic shortages of milk and also the dearer price in the long term. I foresee the ruin of the critical supply chain in any industry dependent on dairy milk for survival.

And m ost importantly, I foresee Dangote becoming one of the 10 richest men in the world!

Abiola was once the richest man, where is he today?

Nemesis909:
Did the government stop you from setting up your own dairy ?

I thought you guys always boasted about competing.

Chest beaters.

Will you keep quiet!

This is a policy that should be given at least two years advanced warning before implementation, during which there could be a gradual increase in tariff payable on imported milk! Or you think everyone has access to the corridors of power and idle billions from cement monopoly like your kinsman Dangote?

If anyone beats their chest, how does that affect you?

IGBOSON1:


Will you keep quiet!

This is a policy that should be given at least two years advanced warning before implementation, during which there could be a gradual increase in tariff payable on imported milk! Or you think everyone has access to the corridors of power and idle billions from cement monopoly like your kinsman Dangote?

If anyone beats their chest, how does that affect you?

Sharap.
Dangote is my kinsman by the fact that we know how to make money.

Government encouraged you to set up dairy farms, you fought against it.

All of a sudden, you are unhappy about the ban.

Nonsense,

IGBOSON1:


Will you keep quiet!

This is a policy that should be given at least two years advanced warning before implementation, during which there could be a gradual increase in tariff payable on imported milk! Or you think everyone has access to the corridors of power and idle billions from cement monopoly like your kinsman Dangote?

If anyone beats their chest, how does that affect you?

Ask the olodo if its his chest they beat.

Nemesis909:


Sharap.
Dangote is my kinsman by the fact that we know how to make money.

Government encouraged you to set up dairy farms, you fought against it.

All of a sudden, you are unhappy about the ban.

Nonsense,

u get correct sense.Those animals will always cry.na only bad news dem sabi

grandstar:
The "ban" on the importation of milk is going to ruin the milk industry. Million of Nigerians are either directly or indirectly dependent on imported milk and will impoverish them.

Also, as the author has mentioned, it will lead to Nigerians paying higher prices for this basic product.

I see chronic shortages of milk and also the dearer price in the long term. I foresee the ruin of the critical supply chain in any industry dependent on dairy milk for survival.

And m ost importantly, I foresee Dangote becoming one of the 10 richest men in the world!

u get solid problem

Nemesis909:
Did the government stop you from setting up your own dairy ?

I thought you guys always boasted about competing.

Chest beaters.

gud one beta person

We had a herdsman's crisis everywhere Alhaji is proffering solutions to the problem while also providing jobs for many people. Biko rather than condemn we should be appreciative .You people should leave Alhaji out of this matter o.

TheGreenLand:
u get solid problem

Because I said the truth, I get solid problem. Na lie you wan hear?

The country imports 98% of its milk needs. This is a country of 200million people.

How is the country to produce enough milk to cater for the 200 m people in record time considering that local cows have very poor milk producing capabilities?

Dangote "milked'' the consumers dry through the ban on the importation of cement. Nigerians were forced to pay through the nose for cement. The same will now occur with real milk.

grandstar:
The "ban" on the importation of milk is going to ruin the milk industry. Million of Nigerians are either directly or indirectly dependent on imported milk and will impoverish them.

Also, as the author has mentioned, it will lead to Nigerians paying higher prices for this basic product.

I see chronic shortages of milk and also the dearer price in the long term. I foresee the ruin of the critical supply chain in any industry dependent on dairy milk for survival.

And m ost importantly, I foresee Dangote becoming one of the 10 richest men in the world!

none thing stop the foreign firm having their plant in naija if the band is effective i.create employment chivita and promasidor will employe more ii. Fulani will station their cows because those firm we sign mou with them iii.economy diversify more forex in the nation purse

Built2last:
David Piling did a Lunch With The FT with Aliko Dangote. I was so vexed I did a thread response to him on twitter.

But there is something else worth discussing here. Dangote made a comment when talking about economic policy that is seriously worth unpacking. In talking about the usual import vs local production whatever, he said the following:

“What Nigeria needs is to produce locally what we can produce locally,” Dangote says, nibbling at a skewered satay, and defending the thinking that has made him rich. “Nigeria still imports vegetable oil, which makes no sense. Nigeria still imports 4.9m tonnes of wheat, which does not make sense. Nigeria still imports 97 or 98 per cent of the milk that we consume.” Of the latter (astonishing, considering the country’s roughly 20m cows), he says, “The government needs to bring out a draconian policy to stop people importing milk, just like they did with cement.”

Read those comments very well — they spell the fundamental challenge facing the Nigerian economy and why it is not working for the vast majority of Nigerians who are born into poverty, live in poverty, die in poverty and pass on the same poverty to their children.

Poverty is not just about what you earn it is also about what you pay. The worst combination is to be poor in what you earn and poor as a result of what you pay. This is one of the things killing Nigeria and turning the country into a poverty factory. Nigerians earn low wages but that in itself is not the end of the world — nobody expects Nigerians to earn the same as Americans. The killer is what Nigerians pay for the basics of life. And time and time and time again, Nigerians pay a lot more because of government policies.

They are planning for you

Dangote starts his comment by saying Nigeria should produce locally what it can produce locally. No reasonable person can ever argue with that. But the moment he starts saying importing something does not make sense, that is when you should be wary. As we used to say when we were growing up — he is planning for you. And the plan is not a good plan.
Think of all the problems with producing milk in Nigeria today — poor cow breeds, medieval practices such as trekking for miles upon miles with tired and impoverished looking animals, cows that only eat what they see on the road or on someone’s farm as opposed to being served a diet like elsewhere, lack of expertise and various other things. You can still produce milk in Nigeria even with all those problems but every single one of those problems is a cost. You can produce milk with a cow that has trekked from Port Harcourt to Potiskum but that milk will cost more because it will only produce a little. Imagine you need N5,000 to survive for a month and you have one cow as your only source of income. If that cow produces 5 litres of milk in a month, you have to sell each litre for N1,000 to survive. If it produces 100 litres of milk, you can sell the milk for N50 per litre to survive. This is a gross simplification but this is the general idea of productivity and how it helps to bring prices down.
Aliko Dangote has not said a word about all the problems with cows that makes Nigerian milk so expensive. He skipped all those and jumped straight to ‘draconian policy to stop people importing milk’. Of course if you put out a ‘draconian’ milk ban today, milk will be produced in Nigeria but it will be produced at the Nigerian price, inclusive of all those problems affecting Nigerian cows. On top of all those problems and costs, a profit margin will be added because this is not charity. There are no two ways about it — Nigerians will pay A LOT more for their milk if such a ban comes into place.

Those words Dangote uttered are a play for the money in your pocket. The moment you are left with no option but to buy the Nigerian milk, you must part with the money in your pocket and hand it to Dangote or whoever is the beneficiary of the milk policy. You WILL be poorer. Whatever you are paying for milk today, you WILL pay more after the ‘draconian’ ban. I repeat — You WILL be poorer. Dangote is planning for you. And crucially, the incentive to solve all those problems that were there before the ban will now be reduced. Afterall, problem or no problem, the milk will be sold at a profit. This is why Dangote himself is moving his cement all around the country inefficiently with trucks and does not innovate. Why should he? The thing has a 47% profit margin as he himself said in the interview.
You cannot win this fight to protect the money in your pocket because Dangote has the ears of the government and nobody is fighting for you in Aso Rock to keep your costs down. The only people the government listens to is people like Dangote. You WILL be poorer.

Policy for me, Poverty for you

Again — poverty is not just about what you earn, it is also about what you pay. Unless your income goes up, if you start paying more for the same product, you will be poorer. I have written ‘severally’ about this using rice as the example. Nigerians did not get a pay rise from anywhere in the last couple of years but in the name of local rice production, government and farmers entered into a conspiracy and made Nigerians poorer through higher rice prices. Well, the income of the farmers went up but Nigerians as a whole became poorer. You cannot turn around and complain about Nigeria being ranked as the poverty capital of the world when you make their food more expensive deliberately. It is the logical consequence of the policy. It is also the same thing with cement that made Dangote rich.
This is why he is ‘a billionaire 14 times over’ and Nigeria has a 17 million housing deficit and poor infrastructure. The problem that cement is supposed to solve is right there staring us in the face but someone has still become a billionaire from it. The guy who is selling his 5 litres of milk for N1,000 per litre is also surviving but as he’s selling only 5 litres, a lot of people are obviously not drinking milk. So the problems that milk is supposed to solve like strong bones will remain but someone is making money from selling milk.

https://aguntasolo.co/dangote-wants-you-to-be-poor-1ab599da370e

Cry me a River. This Igbo man will use every policy of the Government to make a subject of Propaganda. Besides, it's your Igbo Brother (CBN Governor) that made the policy. If e pain you well, put the blame on your Bloda.

This guy loves monopoly and buys off his competitors.
If he can't buy off his competitors he sells off the company.
Just wait and see he will start milk production.

What is competitive advantage again. We have crude oil, build optimally functional refineries we say No. All of a sudden milk is the problem of all our misfortune. Let's focus abeg.

hakeemhakeem:


none thing stop the foreign firm having their plant in naija if the band is effective i.create employment chivita and promasidor will employe more ii. Fulani will station their cows because those firm we sign mou with them iii.economy diversify more forex in the nation purse

For over 30 years the country has been hammering on import substitution and local sourcing and it's not working

Protectionism has failed woeful to industrialise the country. It's the wrong way to go.

It's not the job of the foreign multinationals or local farmers to set up diary farms so the country can be self sufficient in milk production.

First and foremost,the country has no comparative advantage in milk production. That comparative advantage is extremely necessary. It's like asking a very fat man to run the 100 metres sprint. He can run it but you well know he can never win it. If it's shot put or Sumi wrestling, he'll do great but not in sprint. People will wonder how he even able to be picked in the heats.

There are things the country excels at such as Shea butter. Nigeria can earn as much as $2bn from it in export revenue. There are many other products and commodities the country excels in and should focus resources on. Milk production just isn't one of them.

I've always said dz, and some people always choose to argue it.

people like aliko are part of da main reasons y dz country is going down economically.

with their money & influence, they push da government to make rules that makes them richer and gets da poor man poorer...

it's a pity that many poor people still support his agenda even when da truth is staring them in da face