Publication Type: Other
Countries: Nigeria
Authors: SOAS-ACE
Publication date: June 2019
Keywords: Corporations
Learning from the evolution of Nigeria’s diversified private sector conglomerates in their use of discretionary political connections for both resource capture and solving market failures
Research Question Nigeria suffers from low levels of industrialization and remains confounded by the dominance of extractives (oil and gas) and high levels of corruption. Only a few private companies, mainly commodity-based, diversified conglomerates, have reached a level close to their sector’s productivity and competitiveness frontier. This research aims to investigate how regime proximity and rent seeking by the major diversified business groups has helped in their productivity dynamics.
Key Findings Initial interviews and data collection have allowed the team to identify major conglomerates in Nigeria and their operations in different sectors. Conglomerates in extractive sector and non-extractive sector have used regime proximity in different ways with the latter being more inclined towards enhancing their operational strength.
Implications
Conglomerates have used regime proximity as a tool to generate formal and informal power and resources and resource sharing has at times led to productivity growth. However, this has also led to discretionary and ‘cronyistic’ concentration in many key sectors that will be difficult to control. The emergent pattern of their diversification and reinvestment incentives is currently being investigated.
