‘08/2018 DDangote: Africa wil deliver on its promise - African Business Magazine 600 + 20 0et0ber 2018 * nosommsais Few individuals embody the Aftican growth story more than Nigeria's Aliko Dangote, arguably Africa's mos succesful and actualy it rchest man. With an estimated personal fortune of $18, he and the corpaay that bears his name =the Dangote Group ~have become Byward fr business succes ia Aiea Esublished in 1981s wading company, the Group has since grown ino a spravling and diversified conglomerate, spanning everthing ftom food processing 10 oi and gas, realestate, logsties and finance. With its base in Nigen, the Dangote Group i now in the midst of an aggressive pan-A ian expansion drive ‘Tho latest addition i Zimbabwe, where Dangote announced plans to construct $400m coment plat in September, I Juno, it aunched a majo cement plant in the Ethiopian capital, Addis Ababa, 95 well as commissioning a 8250m factory in Cameron, ‘These investments a to a divers roster including Senegal, Kenya, Libera, South Aftica, Tanzania and Siera Leone Svch apuressve expansion in 2015 might surprise some, The collapse ofthe ol price, coupled with the slowdown ofthe Chinese economy, has hit Atcan economies (Growth across all 48 sub-Saharan coutres is ow forecast at 44% in 2015 by ine IME, 2 doward vision, and below the regional average ~ which has exceoded Soh over the last Few year, Figures ike this have prompted bearish helines from major international news sources, On 15! September, Bloomberg News ran a story withthe headline “Africas Oversld Growch Story Has Investors Confronting Losses, echoing ongoing criti ta he comtaan's "Africa Rising” naraiv is being overplayed Dangot's home county of Nigeria Attics largest economy is no exception inthis regard. Growsh fr 2015 is forecast at 4.8%, down from 63% in 2014. As ‘Aes lngest oil producer and exporter it has aso been hit partieulrly ard by te collapse in oil prices, Wits exports accounting for 70% of government revenue tnd almost all ofthe county's foreign exchange caning, there have been pronouncements tha the cour is "bos" Dangote, wo speaks ina measured but forceful tone is unimpressed by such hetorc, saying," alotor red fags.” think thee is quite alot of exaggeration. Anything with Nigevia rises First snd foremost, he insists, itis important to understand the significance ofthe change of eadership the country has undergone tis yea. In Marsh, apposition candidate Mukarsnadu Bubari convincingly defeated incumbent president Goodluck Jonathan. This marked the fs time an mcurbent was defeated at the polls in [igetia, and has raised hopes the new administration healds «meaningful change in leedershp. Dangote has no doubt this ete ase, saying tha the election of Presiden Buhari “ike day and night compared to the previous administration” The eoonomy was not managed propel,” he adds, highlighting the notoriously high volumes of oil hat are siphoned off oficial production loves and sold on the ‘black marker daily basi As much as 50,000 bartels «day have gone missing to this in recent years, representing billion of dlls “Ws welnown thing but there was no leadership to sop all the leakages," e says, and is crtin the new goverment "havea great confidence in thom and I belive they will actualy doth right thing." Dangoe says, using the is assets Surprised atthe Presden's modest wealth (single bank account with $130,000 in i), he says tha ‘thas what you have they ae very honest people” Beyond the change in po economy. ample of President Bubar's recent decision to de thought he would be declaring much mare money, but cal leadership, Dangote argues tha the significance of fling ol prices must be analysed with a nuanced understanding ofthe country's “itis te the ol pice has actually come down by half, but a the same time, Nigeria is avery dynamic place” He points tothe estimate that while ol dominates foreign exchange earings, the agriculture sector alone contributes more tan 30% to GDF, significant the il sector. Other sectors such a telecommunications~ Nigeria is Affic's largest mobilephone market~as well as financial services and tall, hae also emerged _smajer contributors othe economy since the tur of the century. Their growth contributed to the 2014 re-evaluation of national economic deta, which saw its GDP ttost double, Far fom being a thea tothe economy, Dangoe believes the collapse nil prices may even represent an opportunity ‘Itmigh be a blessing in disguise for usin Nigeria, because it wll force us to be moe serous and more focused in terms of diversification ofthe economy.” ‘The ned for dvesiiaton i close to Dangote’s heat, and has fetured strongly in the evolution of his company. While il primarily known fr its cement business, itsuaddles a multitude of setrs, including food procesing, finance and rel esa. “The bottom ine isnt the ony driver ofthis emphasis on divesfctin, he explain _ntps:latricanbusinessmagazine.comreglonwest-atficaldangote-sca-wil-delver-on-ts-promisel 218‘08/2018 DDangote: Africa wil deliver on its promise - African Business Magazine “We need to ook at how do we diversify the esonomy,” he ays aldng that “we ar looking a this ese and trying o adres it asa conglomerate, with the hope that others wil joi.” He highlights projects he heieves wil have far reaching impact on the Nigerian economy. ‘This includes a planned SS0km gas pipeline projet wo connect the oil-producing Niger Dela region i esimates the pote generation capacity ofthis projet to be 12,000NW ~ several ies the county's current installed eo Inajor einer) to process erude oil locally, and adds the county's chron ue shortages, “This lon ‘hin will help in shaping and also wansforming the economy of Nigeria,” Dangote says. “The ned for diversification i challenge faced by most of Nigeria's poes onthe continent, and his expansion drive goes hand in hand with a desire to soe economic ‘progres not justin his home county, but across Aries “Weare als trying to make sure hat we actully help in rms of uansforming the Affcun economy...we Aicans don't really invest in our own economy, and people will ot elly come and transform our en eeonomy for us. Forte time being, operations ouside of Nigeria are rested to cement prodactin, he explains, Because is a "busines hat we know very wel, We will et there ‘wih the oers 00, but we ned to do more of consolidation moving forward.” While he has no doubt that business will play a crucial role in realising the continent's economic potential, Dangte is unequivocal about he need for strong leadership fiom governments to suppor companies. “There is no way the private sector wil beable to drive the economy without the cooperation ofthe government. The ae the facilitators, they need to rollout good policies for you to even be interested in investing” More than anything, bo argues, hare needs io he more concerted action around stengthening aston. “This one ofthe areas that we ae lagging Behind. Instiutions we very, very important, Obviously nobody wil go and invest ina place where there is nome of law" He is also outspoken on the issue of regional integration, Intra-Affican trade is curently estimated tobe lower than 15%, epresenting enormous untapped potential, iis whenever I meet any president. There sa bg challenge which we ned o look a he fre momentum, goods and services within Aca,” he ys, “always: ‘plang to the same cntinent but don’t know whether we really trust each other.” rousing that ‘Despite myriad pan-Aftican conferences and agreements aimed at addressing tis challenge, Dangote believes "iets alot of alk about integration but realy not much ation is ikon Unless governments adres thee sus I hink presidents have just been thee oonferenes] to waste taxpayers! money.” ‘While exhibiting tangible fasuation ove the lack of progress on such a fundamental issu, Dangote is ulimately optimistic about the prospect for beter leadership and economic development on the cotinen. “Leadership is changing within Aca. thnk there ate quite a lo of transformations that are happening that people are nat ven Tookiag a. So there are pockets of improvements hate and there. Weare noi yet there Br we ate ring to get thee" Rising slobal interest Fellowing more than a decade of sustained and resilient growth the conditions have arguably never been bette. As Affica's economies se, 50 to does slbal interest inthir commercial and social potential. _ntps:latricanbusinessmagazine.comreglonwest-atficaldangote-sca-wil-delver-on-ts-promisel 38‘08/2018 DDangote: Africa wil deliver on its promise - African Business Magazine Foreign investment has shot up in ecen years. According to consultancy fem» Emnst & Young, capital investment across Affice oalled $128 in 2015, The Aca investment conference cuts overhcating wit seemingly insatiable demand for investmcat oppstunities onthe conte. “The interes i not jus rom the business community, From the US to China, the word's maior economies are atively seeking to compete for opportunites in one of the world’s fastest growing regions. ln August 2014 US President Barack Obama convened the fit ever US-Afica Leadership Suni, which was used ea pportnity to fcitatecommerialinvesimens from American companies, many of whom have be pushing fr more suppor from Washington fo yeas, ‘The European Union has its ow iteration of such platform i the FU-Afica Business Forum, and even counties such s Norway, which have long viewed Aiea purely asa destination for development sg, are actively encouraging ther companies to invest Yel nowhere hes the growth in nites! been more pronounced than in other emerging markets ~ most aolbly from Chins [ts now virally impossible travel saywhere on the continent without a visible representation ofthe Asian gia’ economic inlucnce. Alscady the coins largest single wading pater, an ‘volumes are forecasted tobe as high as $400ba in 2015. Other major emerging markets including Indie and Brazil have also signiealy ramped up thei commercial nd polcal engagement withthe continent. ‘To Dangote this swell in interest comes as no suprise. There is nowhere foreign investors can generate the kindof returns Afica offers. You ae talking about» 30% return on your investment. tis a good place to invest.” In principe, his surge in frsign capital represents sigifcant opportunity for Asan economies, but he suey that cre balance mast be strack “Some ofthe foreign investors, when they come ia, they actualy take mare ou than they invest. So they ae actualy not helping" At the same time, however, he _argucs that most Afican economies donot have the inci strength to go without foreign capital inked » landmark $43abn del fm capital can represent. Even a company the sizeof the Dangote Group relying onthe support of foreign partner ofl its growth The company recent with Chins’ Sinoma Ineratonal Engineering Coto dive is pan-AMfican expansion and Dangot isin no doubt about the vale fo “Ther is no way we would be able to grow the cement business a fst as we are without the Chinese partner we have, We don't have the capacity but they do have the caput and they have the people,” he remarks UUnimately, Dangote acs tht Atos cannot dovslop in isoltion, but must take the lad to ensure that any foreign captor interest in the continent serves it ong term development nest “1 elieve that we willbe able to transfor Affica by ourselves. Not lone, but we wll ead and others wil follow.” “The upside is grea, it's fantastic - it wil happen. There ae obviously ups and downs, but we ae going through the normal growing pins of Tie, which think wil ‘make us stronger than where we were before Given his suecess tod, few woul ange with such prediction. Lanre Akinola 0 Rate this artle Aliko Dangote Dangote Group ‘Nigeria ‘October 2015 AB Afican Business and its award-winning eam i wiely respected forts editorial excellence, We provide the al mporanttols enabling you to maintain a critcal edge ina cominet thats changing the worl. Ou special reports peoilea wide range of sectors and indus including Energy, Oil and Gas, Aviation, Agecultae to name but fe ‘Rend our Discussion Policy Related Posts ‘Agro-processing isthe sector that will provide jobs ‘On the sidelines f the AMtcan Development Bank's meetings in Busa, South Korea, Dr Carlos Lopes spoke to African Business about the way forward for Aiea’ economies, _ntps:latricanbusinessmagazine.comreglonwest-atficaldangote-sca-wil-delver-on-ts-promisel 418