To Govern Is To Choose: A Review of ‘Lincoln’

I am fully invested in the Abraham Lincoln legend as sold to the world by Americans. I trust the system that scrutinises the past with obsessive scholarship and has settled on the conclusion that the man was perhaps America’s greatest ever President.

And it was all so very unlikely. In 1860 after Lincoln had been nominated as the Presidential nominee at the Republican National Convention in Chicago, the New York Herald wrote:

The conduct of the Republican party in this nomination is a remarkable indication of small intellect, growing smaller. They pass over statesmen and able men, and they take up a fourth rate lecturer who cannot speak good grammar.

It was always unlikely that this seemingly ordinary man who had known so much sadness and disappointment all his life would become the same man of whom it was said ‘he was bigger than his country – bigger than all the presidents together’ (Leo Tolstoy).

There is much to the life of the man so it is understandable that this film chose to focus on just one month of a presidency that lasted 4 years. Life, as they say, is like a suitcase…some people pack more into it than others.

The American civil war had allowed Lincoln to exercise ‘dubious’ powers when he made the Emancipation Proclamation in 1863 freeing all slaves in the Confederate states. But then, 2 years later, as the war was inevitably coming to an end, Lincoln began to wonder what might become of the freed slaves once normality returned and the country went back to being governed by the constitution seeing as the constitution regarded ‘other persons’ as only being 3/5ths of a ‘whole person’ among many other ways black people were considered subhuman by the constitution.

Thus began a race against time to amend the constitution to make permanent the freedom of the slaves as granted to them by the Emancipation Proclamation. If the war ended without an amendment, Lincoln feared that there would be no motivation to amend the constitution by a rowdy Congress. Worse, before 1865, the last time the constitution had been amended was in 1804 – 60 years before. Whatever it was going to be, it definitely wasn’t going to be easy.

Everyone else around Lincoln, especially in his cabinet, was simply eager to end the war. Lincoln saw something more important – ending the war was just as important as ensuring that the matter of slavery was ‘settled for all coming time. Not only of the millions now in bondage but for unborn millions to come’. This was the crux of his argument and the story takes us along as he slowly but surely won over people to his side using the moral force of his arguments.

But simply leaving rice in water wont cook it in the same way that rhetoric alone cannot get a constitutional amendment through Congress. So Lincoln and friends began to build an unlikely coalition of disparate characters to do whatever it was going to take to pass the amendment. Bribes were given, threats were made, congressmen were blackmailed. After the amendment had been passed, Thaddeus Stevens , leader of the radical wing of the Republican party in Congress remarked:

The most liberating constitutional amendment in history, passed by corruption, aided and abetted by the purest man in America

Lincoln’s capacity to remain who he was remains the thing I find most fascinating about him. There are reminders of his ‘ordinariness’ throughout the story – anger, self-doubt, domestic palaver – that make us realise that this was an ordinary man who achieved extraordinary things.

There are endless things a leader can do once he has power in his hands. To govern, as they say, is to choose. All of the choices that confronted Lincoln were terribly hard ones – end the damn war which had claimed so many lives or delay (allowing more people die) while trying to secure an amendment to the constitution.

Fondly do we hope, fervently do we pray, that this mighty scourge of war may speedily pass away. Yet, if God wills that it continue until all the wealth piled by the bondsman’s 250 years of unrequited toil shall be sunk and until every drop of blood drawn with the lash shall be paid by another drawn by the sword, as was said 3000 years ago, so still it must be said “the judgements of the Lord are true and righteous altogether”

We now know he chose well. And he was well aware of this; ‘Each of us has made it possible for the other to do terrible things’ he told General Ulysses Grant who was waging war against the Confederates on his behalf. This was no game. And it illustrated the amazing thing about Lincoln – he was true to himself above all else.

To this man, power was only useful as long as it enabled the coming to be of something greater than himself, guaranteed to be judged kindly by posterity.

Every man is said to have his peculiar ambition. Whether it be true or not, I can say for one that I have no other [ambition] so great as that of being truly esteemed of my fellow-men, by rendering myself worthy of their esteem. How far I shall succeed in gratifying this ambition is yet to be developed

There it is again…the self doubt, the single eyed focus on posterity and a legacy. He wrote the above words when he was 23 years old and making his first bid for public office in Illinois. He lived for another 31 years and remained true to himself. Perhaps I will find another hero but for now, I consider this man to be SI unit of what a leader ought to be.

In the one scene where we see him get angry and frustrated at his prevaricating cabinet, he loses his cool after the whole plan is threatening to come undone over 2 votes proving hard to obtain. He thunders at Congressman James Ashley, ‘I am President of the United States, clothed in immense power! You will procure me these votes!’. The one time we see the man exercising the immense powers of the President of the United States, it is to demand a mere couple of votes to get his amendment passed. Everyone else was out-argued or bribed…but the angry powers were only brought to bear on a wavering congressman…for 2 votes. Not to order an opposition politician to be shot or arrested.

Those who have power in Nigeria today will do well to watch this film and perhaps read Doris Kearns Goodwin’s magisterial book, Team of Rivals: The Political Genius of Abraham Lincoln, on which the film is based. Perhaps they might learn the point of having that power in the first place. They might be surprised to discover that it isn’t merely to enrich one’s self  or shut down those who disagree with you but to, every night and day, seek to advance the common good with it.

And when the difficult decisions are to be made, the hard choices have to be faced, a useful rule of thumb is to think of those unborn and how our choices might affect them. Leadership cannot seek to constantly appease and accept the conventional wisdom. It must be able to do the hard things and to first be convinced of itself so that it can then convince others. More than one person told Lincoln that he could either have abolition or end of the war, not both. He called their bluff and got both.

Sometimes I wish I was American….for the sole reason of being able to say Abraham Lincoln was once the President of my country.

Surely you are going to see this film now? Please do. And I hope you find a useful leadership lesson to take away from it.

FF

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Industrialisation of Mumurity in Nigeria: The Ajaokuta Example

Some context will be useful before we get into the meat of the matter.

You may have heard, sometime in October or November last year, about the steel giant ArcelorMittal’s decision to close a steel plant in Florange, France. The closure was going to lead to the loss of around 700 jobs. ‘Zut Alors!’ cried the French industry minister, Monsieur Arnaud Montebourg who practically insulted Mittal and told them to leave the country.

The French minister is not stupid but he is a politician looking for votes so it is important to discount what he says and look at the real reason why the plant needed to be closed. Since the beginning of civilization  human beings have managed to extract around 40 billion tonnes of iron ore from the ground. Half of this amount has been extracted since 1990 suggesting that we are getting really good at digging up the stuff from the ground. But something else has also happened at the same time. I am coming to this shortly.

Stage 1 of this process involves turning iron ore into steel i.e. ingots. Stage 2 is where these ingots are then turned into what we need like steel sheets to make cars and other things. How does Stage 1 work? Well you need to have a blast furnace that heats up the iron ore to something like 2000 degree Centigrade or thereabouts to turn the iron ore into ingots. As you can imagine, it is energy intensive and rather costly. For Stage 2 you simply use a steel rolling mill to turn the ingots into steel. This technology is pretty standard and hasn’t really changed in a long time.

So what has happened that I alluded to above? Well because we have already extracted so much iron ore from the ground, by extension we have so much steel in various forms – cars, building materials etc. Concern for the environment is also now a very big deal everywhere. These 2 factors now mean that recycling of existing steel is a BIG industry. The implication of this is that Stage 1 which I described above is becoming more and more redundant in the process of steel making i.e. we don’t really need to dig up so much iron ore anymore and then melt it into ingots in a blast furnace. This point is incredibly important. Technology has changed and continues to change to the point where the old way of doing things is now very expensive and uncompetitive.

Back to France. What type of plant is the Florange one that ArcelorMittal was trying to shut down? You guessed it – it’s a blast furnace.

See this quote from The Economist (emphasis mine)

Like many other steelmakers in an industry plagued with overcapacity, ArcelorMittal is hurting. It wants to close two uneconomic blast furnaces at Florange in Lorraine and concentrate its French steelmaking at its coastal sites at Dunkirk, on the English Channel, and Fos-Sur-Mer, on the Mediterranean. But it wants to keep its rolling mills at Florange

This is a business at the end of the day and there really is no point in keeping a blast furnace when you can get the same steel to feed into a rolling mill from scrap cars and such like.

So what has provoked this article I am writing? I saw something in the papers today from a couple of days ago and I was alarmed by the ignorance. It seems Nigeria is in the process of once again ‘reviving’ the Ajaokuta Steel Company (ASCO). The Guardian interviewed a ‘top management official’ of ASCO who unsurprisingly sought anonymity. Here is his ignorance in all its glory (emphasis again mine)

This has been the stand of the World Bank/IMF and their imperialistic agents against the (ASCO) project. They earlier advised us in 2001 to turn the entire steel plant into a power generation plant as in the Hatch Associates report. We were equally advised at a certain time by Kobe Steel in the guise of an investor to demolish the blast furnace plant to enable them to install a fast-melt facility in another location in the steel plant. This was vehemently and wisely rejected by the Presidency at that time

Goodness Gracious, Great Balls of Fire. The man is so convinced of his ignorance that he is certain that the recommendation of the World Bank and IMF is an ‘imperialistic’ one. Who is this President that ‘wisely’ rejected this decision at the time? Isn’t it amazing how ignorance can hold us back so much especially by people who are so dead certain of what they are doing they couldn’t possibly be wrong? Of course it is the white man who does not want anything good for us! Note that the consultants from Kobe Steel advised us to install a fast melt facility which is essentially a way of recycling steel i.e. bringing us up to speed with the world. But No! We don’t want that one!

At the time ASCO was conceived, the idea of a blast furnace possibly made sense. But like everything else, we messed up and delayed for so long on it that time and technology have since left us behind. Where is this going to take us? Well from the same article we get this

Vision 20:2020 economic blueprint as approved by the Federal Executive Council clearly recommended that the nation shall produce 12.2 million tonnes of steel per annum by the year 2020 out of which Ajaokuta steel plant is to produce 5.2 million tones/annum

Just like the bone headed policies that got us into the cement palaver we are currently in, we are about to embark on another adventure that will produce nothing other than expensive steel which no one will buy. As I’ve stated previously, the trouble with Dangote, Lafarge and other made in Nigeria cement is mainly that they don’t add anything new to the production of cement. They simply cannot make it cheaper. The world was never waiting for us to make cement just like they are not waiting for us to make steel. However the world will be interested in us if we can make cheaper cement or steel. This a crucial distinction. (You can do some research on an American company called Nucor which perfected the technology for recycling steel and has been a pioneer in the move away from blast furnace technology).

Once the government has committed its billions to reviving ASCO as it is, the next step will then be to – drum roll – ban importation of steel to ‘protect our nascent’ steel industry. A great deal of surprise will then be expressed when the total number of countries willing to buy our expensive steel comes to zero. Even more alarm will be expressed at the smuggling of steel into Nigeria and the perpetrators of this unpatriotic act will be decried and flayed.

Let’s not forget a lot of educated analysts who will make the case for protectionism to boost our industrial base. These arguments will be made with a lot of intelligence (and zero amount of wisdom) on the pages of Business Day and across the interwebs. The arguments will be made with so much big English that some of these analysts might unwittingly sexually arouse themselves and wet their pants as they ‘protect’ our industry. At no point will the actual underlying issues be addressed. In short we are going to attempt to drive this car of economic development with the handbrake on.

My question to you is this – do we really need ‘imperialistic’ enemies when we are capable of doing so much damage to ourselves with our ignorance?

Keep an eye on this story.

FF

The Konkere Wars – SOS Olusegun Aganga

In April 2012, the editor of the Financial Times, Lionel Barber, visited Nigeria and in the course of his visit he had dinner with some government officials in Abuja. According to him, one (unnamed) guest pointed out to him that ‘In Nigeria, business is the business of the state’.

The background to this gist is that something terrible has happened to our cement industry. The evil that is foreign cement has been allowed to be imported unchecked to the point where it is now threatening our nascent industry. On the patriotic side of the debate we have Dangote and Lafarge who have nothing but the greater good of Nigeria at heart as local manufacturers. It is a mere coincidence that they have conspired to give us the most expensive cement prices in the world. On the ‘enemy of progress’ side of the debate is Ibeto Cement, a company that imports bulk cement into the country to the detriment of our patriotic local manufacturers. Again, it is merely a coincidence that there is so much demand for this imported cement which is perhaps cheaper. The 2 sides to this debate are fighting like little children. It is into this playground that Mr Aganga has stepped into and decided to calm everyone down. ‘You are causing a cement glut in Nigeria and we are going to shut down our plants’ cried Dangote and Lafarge. ‘Is a lie!’ predictably retorted Ibeto.

Listen to Aliko Dangote:

Our group brought on stream 6.5 million metric tonnes per annum at Ibese in 2012. Also, in the same year, Lafarge brought on stream another 2 million metric tonnes per annum at its new plant in Ogun State.

“That is 8.5 million tonnes of new capacity. This is 8.5 million metric tonnes per annum in a market (South-west) that actually needs 3.5 million metric tonnes per annum.”

He said that in an ideal situation, Dangote Cement and Lafarge should be able to export excess capacity to Benin Republic and other neighbouring West African countries, but those countries have imposed all sorts of restrictions on cement imports from Nigeria, making it uncompetitive.

This is bad bad bad. Did Benin Republic not know that we planned to dump, sorry export our cement to them when they saw us building our cement plants? Do the Beninois not have access to Nigerian TV stations? Surely they must have seen our President going around the country commissioning factory after factory to produce cement? Did they think we were going to drink the extra 5m metric tonnes we didn’t need but produced anyway?

Lafarge also have similar complaints:

It is Ibeto Cement that is being dishonest. The company is dumping cheap cement in the market and is exceeding the import quota it is allowed by the Federal Government.
“We would have no concerns if the company was just bringing 1.5 million metric tonnes per annum. But it actually takes advantage of the loopholes in the system and brings in more than is permissible.

Ibeto Cement is doing this with the active collusion of the Nigerian Customs Service at the ports,” alleged the Lafarge official.

Why will Ibeto come and dump cement in Nigeria when the plan was for us to dump our own cement in Benin Republic? Who are the wicked Nigerians who are buying this cheap cement anyway? At this point, I will advice Mr President not to rule out any options including a ground invasion of Benin Republic. Ibeto should also be banned from everything in Nigeria. Anyone who offers Nigerians cheaper cement than what Dangote and Lafarge are selling it for is obviously a wicked person. It is not fair on a thief if everyone starts installing burglar alarms and iron gates in their houses. It makes stealing harder than it should be.

Where two or three Nigerian businesses are gathered, a cabal is soon formed. Ergo, the Chairman of the Cement Manufacturers Association of Nigeria, Mr Joseph Makoju, also weighed by warning of the grave dangers of ‘unnecessary importation of cement’. If we are producing so much cement in Nigeria, why are people buying imported ones? Is it because it is cheaper? We are the ones killing ourselves in Nigeria.

You see in a rubbish free market system, if someone is making say a 30% profit margin on something and the opportunity cost of that investment is say 10% (what you can get by putting that money in a bank account to earn interest), that 20% extra profit will always attract outsiders. One fool will always say ‘well I don’t mind 15% instead of 20% so let me try my luck by reducing prices’. And so on until the profits reduce to the opportunity cost of 10% or slightly above it. We don’t want this kind of system of Nigeria where prices are just coming down and down and billionaires are sweating for the benefit of poor people to buy cheap cement. This is not good.

The correct way to do things is to allow the cement cabal come together and decide how much profit they want to make each on bag of cement taking into consideration target Forbes ranking, price of private jets etc. This profit is then added to the cost and then is announced to the consumers. God forbid a situation where cement prices will come down and Nigerians start using it for ridiculous things like completing the millions of abandoned buildings all over the country that stopped before or after it reached ‘decking’ level.

So how is this problem going to be solved? The answer is simple – Government! You see why my earlier quote was important? To protest this injustice, the patriotic cement manufacturers have gone ‘on strike’. The strategy is now yielding fruit.

According to the ThisDay report, Mr Aganga “last week reached out to the two warring parties and other stakeholders in the cement industry and invited them to a meeting in Abuja today”. This is a war and Mr Aganga has bravely entered it to call a ceasefire.

Why is it important for government to stop this war? Listen to Mr Aganga:

From being a net importer of cement, we have grown to the point that my ministry did not issue out any import permit for cement in the whole of 2012. We have also helped the country to save over N200 billion in foreign exchange that could have gone into cement importation.

More than two million jobs were created among a lot of other achievements. So I take the sector very seriously, I do meet with them regularly to make sure our objective for this industry is kept in focus,” the minister said.

Can you imagine how much armed robbery will go up by if those 2 million jobs that Mr Aganga personally counted were lost? Some idiots might make the argument that we embarked on the production of so much cement without taking into account global trends and now no one wants to buy our cement or allow us dump it on them. This is silly. What is the point of Benin Republic if we cannot sell cement to them?

You will recall that in December, the same Mr Aganga announced that sugar importation was going to be banned from this January. There is a sugar master plan in place and the plan is working. Glory be.

The end of the Konkere War is in sight. Mr Aganga, backed by the full powers of the Federal Government is going to put an end to it. What is more reassuring than hearing a government minister utter these immortal words “I have heard the claims and counter-claims and I have engaged with all the stakeholders”?

According to Aganga, at the end of the entire review, the Federal Government would come up with a fresh strategic direction for the industry, which would have three major thrusts that include the enunciation of policies to help bring down the price of cement and make the commodity more affordable to Nigerians.

He said the second aspect is that he and his team are working on policies that will enhance the consumption of cement and lastly he pointed out that he is also working on policies that will open up the export market for cement produced in the country.

None of these plans can fail. No way. What you just read above is small sample of how awesomely powerful the Federal Government of Nigeria is. Not only is the government in power, it is also in charge. It can bring down prices, just because. It can also enhance the consumption of cement by Nigerians. Mr Aganga did not reveal whether this consumption will be enhanced by adding some of our new-found sugar to it but I am sure this is a pleasant surprise he is going to reveal to Nigerians soon…sweet cement to consume for all Nigerians.

But the most important thing to note here is that the awesome powers of the FGN are not confined to Nigeria. These powers can be used to open up other countries markets to the point where they are rushing our cement like Indomie. If you do not fear God, fear the Nigerian government. Please. For your own sake or else they might open up your market and sell you stuff.

If there are people out there who have been deriving some perverse pleasure from watching our patriotic manufacturers fight each other, I hate to break it to you, your entertainment is over. The Konkere Wars are coming to an end shortly.

Let us end with the quote with which we began – ‘In Nigeria, business is the business of the state’.

FF

P.S A similar thing once happened in France which prompted the great Frenchman, Frederic Bastiat to petition the Chamber of Deputies on behalf of the manufacturers of candles and ‘generally of everything connected with lighting’. It was written in 1845 but the message remains relevant today. Read it here