Peripheral financialisation and monopoly capitalism in Nigeria: the case of the Dangote Business Group

Abstract

This article examines financialisation of non-financial corporations (NFCs) in developing countries using the example of the Dangote Business Group in Nigeria, the largest conglomerate on the Nigeria Stock Exchange (NSE). Our findings suggest that Nigeria is characterised by a financialisation process, where speculative activities expand in banking and capital markets, but not in manufacturing NFCs. Macro-financialisation in banking and capital markets does little to provide finance for Nigeria’s manufacturing NFCs. In the face of insufficient financing from banks and the capital market, NFCs rely on internal funding and trade credit within diversified business groups (DBGs). At the firm level, the financial accounts of Nigerian manufacturing NFCs such as the Dangote Group show weak evidence of speculative financial activities and high levels of investment in productive capacity. This results from a combination of volatile capital markets with excessive risk for NFCs and profitable opportunities in the real economy. While these two factors curtail the negative implications of speculative macro-financial activities, monopoly capitalist concentration processes in DBGs work to undermine effective demand through the disproportionate allocation of profit at the expense of wages.