by Tunde Leye
In Nigeria, we have billionaires who are worth more than the companies from which they are supposed to derive their wealth. We have people making billions from industries where their wealth does not correlate with the activity that such value should generate. How, for example, should someone make billions from cement without a commensurate building boom across the nation? Cause and effect?
One of the most baffling places to study trends is Nigeria. It is as if our value system doesn’t place a premium on the relationship between a happening and the expected results it is meant to achieve. If this happened in the realm of physical phenomena, we would all be baffled. For example, if I jump off a cliff in Europe, I’ll go crashing down. If I do the same in Nigeria, the result will be the same. Cause and effect, perfectly normal.
Twenty years ago, there were no dollar billionaires in China. As the Chinese economy has grown and boomed, the number of billionaires has increased dramatically. In other words, there is a direct correlation between the number of billionaires and the economic growth in China. In fact, the richest and most economically productive regions in the world typically have the most number of billionaires. Hence, the world’s largest economy, the United States has the most number of billionaires in the world – 492. China’s phenomenal growth too has reflected in its billionaire count. Zero 20 years ago, 122 in 2013 and 152 in 2014, up an impressive 25% from 2013. Brazil is also one of the impressive countries with this kind of growth. The growth of the billionaires’ home economy impacts the wealth of the billionaires. This Forbes report shows how the billionaire count and net-worths in India took a dip as India’s economy did the same.
The most important point to note is that these nations where new billionaires are being minted or where the net-worth of the existing ones is growing, they have created new industries or expanded the scopes of existing industries. Also, it is impossible to make billions in these places without radically affecting the lives of many of the citizens. The billionaires in all these places have impressive networths; but the most impressive thing they build is not their personal wealth but the values of the companies from which they make their billions. They are never worth more than their companies
In Nigeria, we have billionaires who are worth more than the companies from which they are supposed to derive their wealth. We have people making billions from industries where their wealth does not correlate with the activity that such value should generate. How, for example, should someone make billions from cement without a commensurate building boom across the nation? Cause and effect? Billionaires like in the Nigerian case are produced only from a few options. The first is through looting public funds. Those ones are not reckoned with in the international business world and are not worthy of mention in this discourse. The second is the one which we must discuss. The minting of billionaires through protectionist government policies or almost deliberate government ineptitude designed to favor individuals who then leverage this to get exorbitant margins from the Nigerian people. No breakthrough industries are created; the people simply pay higher for goods and services. What this essentially creates is a wealth transfer from the general populace to these billionaires without solving any real problems. So, we for example pay extraordinarily high rent because real estate in Nigerian cities are amongst the most expensive in the world. But the landlords are not charging these exorbitant rents simply out of greed; apart from government ineptitude in the area of getting land, the cost of cement in Nigeria is three times what obtains elsewhere. An analysis of the billionaires our banking industry has produced leads to similar conclusions.
Billionaires like ours cannot survive in serious economies where you have to create real value to make billions. As an illustration, Carlos Slim Helu enjoys not only the same type of government ineptitude and favorable policies that our own Nigerian billionaires do, but his telecommunications company which accounts for 73% of his $69Billion wealth charges one of the highest usage fees in the world. He can do this because he has 90% of the Mexican telecoms market. That clearly sounds like what our own billionaires do here. Get government backed monopolies and then charge us the highest fees in the world. When Helu ventured into the United States with CompUSA acquisition, he ended up selling the company because he couldn’t compete in an environment where the government would give him no undue advantages and where citizens would only pay what was fair for the value you delivered.
We as the Nigerian people need to move away from only celebrating the achievement of stupendous wealth by our billionaires and begin to question the basis of their wealth. We also need to question when public officials begin to make some moves that are touted as defending the Nigerian economy. It might just be possible that all they are defending is the monopolies that generate wealth for our tin billionaires.
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Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.