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Johannesburg - In the past 12 months, I have been worried sick that Nigeria could soon topple South Africa as Africa’s economic powerhouse.
My fear is gradually becoming reality.
This week it emerged that Africa’s most populous country outdid South Africa as the largest cement maker in sub-Saharan Africa.
This may not end here. It could spread to other sectors.
Economic think tank, Renaissance Capital, attributed Nigeria’s elevation in the cement sector to increasing demand for the product in Nigeria and a positive governmental regulatory regime.
“The Nigerian cement market has changed significantly, driven by a viable environment, rising demand and increased investment on the back of aggressive economic growth,” Renaissance Capital said this week.
The delivery volume of Nigeria’s cement sector has passed the 20 metric tonnes a year (mtpa) mark.
This is well over South Africa’s current production of 18.3 mtpa.
Nigeria’s demand for cement is poised to continue on its current upward trajectory. This will be speeded up by the socio-economic development currently being experienced in the country.
Dangote Cement, one of Nigeria’s biggest companies, is said to be behind this cement success story in Nigeria.
Dangote Cement runs three factories in the West African country, including the largest in sub-Saharan Africa. Dangote Cement has strengthened its role in Africa as one of Africa’s leading cement makers.
This is good news for someone like me, who wishes African countries all the best.
But it also sends a cold shiver down my spine, because it clearly illustrates the direction the South African economy is going to take in the future.
Corruption is, in my opinion, still rampant in the South African construction sector, which would mean that it will take time before our companies focus on the business at hand.
As companies in Nigeria continue to pay more attention to the business at hand, South African firms still have to answer to authorities regarding corruption.
This affects all sectors, by the way.
This week, Cosatu said the Hawks had given it a “case number” for the criminal charges it laid against 15 construction firms, which were fined R1.46bn by the competition authorities.
On Tuesday this week it emerged again that the Competition Tribunal had given out four certificates to permit civil claims against construction firms that confessed to bid-rigging in the Competition Commission’s recent settlement process.
It is understood that the tribunal is currently formulating about 35 certificates, which will pave the way for more civil claims.
The City of Cape Town has also been issued with certificates against construction groups WBHO, Stefanutti Stocks and Aveng, which were among the 15 companies fined for collusion earlier this year.
These certificates are about the construction of the Cape Town Stadium for the Fifa Soccer World Cup 2010, which was hosted by South Africa and the competition won by Spain.
The collusion and corruption accusations have been a monkey on the shoulders of construction firms for a long time now.
Being accused of collusion in South Africa means these companies could end up paying 10% of their total annual revenues.
This will be too ghastly to contemplate for the management of many companies.
So, maybe they are spending most of their time trying to make this critical burden to earnings go away.
Then they might forget to focus on strategies that could turn their companies into powerful firms that contribute immensely to the economy of the country.
- Fin24
*Mzwandile Jacks is a freelance journalist. Opinions expressed are his own.
My fear is gradually becoming reality.
This week it emerged that Africa’s most populous country outdid South Africa as the largest cement maker in sub-Saharan Africa.
This may not end here. It could spread to other sectors.
Economic think tank, Renaissance Capital, attributed Nigeria’s elevation in the cement sector to increasing demand for the product in Nigeria and a positive governmental regulatory regime.
“The Nigerian cement market has changed significantly, driven by a viable environment, rising demand and increased investment on the back of aggressive economic growth,” Renaissance Capital said this week.
The delivery volume of Nigeria’s cement sector has passed the 20 metric tonnes a year (mtpa) mark.
This is well over South Africa’s current production of 18.3 mtpa.
Nigeria’s demand for cement is poised to continue on its current upward trajectory. This will be speeded up by the socio-economic development currently being experienced in the country.
Dangote Cement, one of Nigeria’s biggest companies, is said to be behind this cement success story in Nigeria.
Dangote Cement runs three factories in the West African country, including the largest in sub-Saharan Africa. Dangote Cement has strengthened its role in Africa as one of Africa’s leading cement makers.
This is good news for someone like me, who wishes African countries all the best.
But it also sends a cold shiver down my spine, because it clearly illustrates the direction the South African economy is going to take in the future.
Corruption is, in my opinion, still rampant in the South African construction sector, which would mean that it will take time before our companies focus on the business at hand.
As companies in Nigeria continue to pay more attention to the business at hand, South African firms still have to answer to authorities regarding corruption.
This affects all sectors, by the way.
This week, Cosatu said the Hawks had given it a “case number” for the criminal charges it laid against 15 construction firms, which were fined R1.46bn by the competition authorities.
On Tuesday this week it emerged again that the Competition Tribunal had given out four certificates to permit civil claims against construction firms that confessed to bid-rigging in the Competition Commission’s recent settlement process.
It is understood that the tribunal is currently formulating about 35 certificates, which will pave the way for more civil claims.
The City of Cape Town has also been issued with certificates against construction groups WBHO, Stefanutti Stocks and Aveng, which were among the 15 companies fined for collusion earlier this year.
These certificates are about the construction of the Cape Town Stadium for the Fifa Soccer World Cup 2010, which was hosted by South Africa and the competition won by Spain.
The collusion and corruption accusations have been a monkey on the shoulders of construction firms for a long time now.
Being accused of collusion in South Africa means these companies could end up paying 10% of their total annual revenues.
This will be too ghastly to contemplate for the management of many companies.
So, maybe they are spending most of their time trying to make this critical burden to earnings go away.
Then they might forget to focus on strategies that could turn their companies into powerful firms that contribute immensely to the economy of the country.
- Fin24
*Mzwandile Jacks is a freelance journalist. Opinions expressed are his own.
