Aliko Dangote wants to transform Nigeria from a net importer of refined petroleum into ‘one of the [world’s] largest exporters of petroleum products by 2020’. Picture: Bloomberg/Jason Alden
Aliko Dangote wants to transform Nigeria from a net importer of refined petroleum into ‘one of the [world’s] largest exporters of petroleum products by 2020’. Picture: Bloomberg/Jason Alden

"I started hustling in primary school," says Africa’s richest man, a soft-spoken Nigerian billionaire whose iconic status reaches far beyond his home nation.

Aliko Dangote, whose riches were built on commodities trading, arrived at a closed-door event hosted by Barack Obama in Johannesburg last week to a reception that rivalled the former US president’s own rapturous welcome.

Then, in a panel discussion with Trevor Manuel and John Collison, Dangote had to field almost all the questions from the crowd of 200 young "Obama Foundation leaders". SA’s former finance minister and the Irish co-founder of Stripe, who in 2016 became the world’s youngest self-made dollar billionaire, were reduced to sideshows.

Dangote, whose net worth of $12.4bn makes him the 100th richest person in the world according to Forbes, says he’s been "testing money for a very long time".

In his early school days, he sold sweets that he bought with his pocket money.

Those trading skills put him in good stead for a formal career that kicked off in 1978 when he started his own commodities trading business.

"Most Nigerians" were in the trading game at that time because "industrialisation wasn’t really what people were thinking about", he recalls.

There are parallels with SA: Dangote says inconsistent government policies and an insufficient or unreliable electricity supply scuppered any efforts to kickstart Nigerian industries.

Not much changed for nearly two decades, so Dangote’s trading firm focused on building its empire through to 1996. "We made a substantial amount of money," he says, adding that he’d never had to borrow a cent until that point.

But as the turn of the millennium approached, Dangote says he hired a consulting firm to assess how the West African nation could shift from its heavy reliance on imports to become a manufacturing powerhouse.

What was required, the consultants concluded, was a cosier relationship with the government so Dangote could push it to start by tackling the energy problem.

With a fair dose of persistence and tact, he says he found a receptive audience and the ball started rolling.

"So we started various industries," including a sugar refinery and a flour mill. (JSE-listed Tiger Brands, much to its regret, bought Dangote Flour Mills for R1.5bn in 2012, but sold it back for $1 after four consecutive years of losses and much criticism that it had failed to conduct a proper due diligence process.)

Soon after those ventures, Dangote trained his sights on something bigger: cement. Nigeria was importing loads of it and there was a chance to change that.

"The president said ‘OK fine, Aliko, what can we do?’ I said: ‘Mr President if we are going to continue to import, we will be importing poverty and exporting jobs, so if we want to produce locally you have to give some sort of incentives where you can only import if you are doing backward integration — and that’s the policy that Nigeria adopted for us to have self-sufficiency in cement."

The foundation of Dangote’s dream: At work on what is intended to be the world’s largest-ever oil refinery. Picture: Bloomberg/Tom Saater
The foundation of Dangote’s dream: At work on what is intended to be the world’s largest-ever oil refinery. Picture: Bloomberg/Tom Saater

And it’s worked. Dangote Cement — which, according to the company’s founder, provides quality products at attractive prices despite the fears of some that state protection would militate against this — is now worth about R147bn, thanks in part to an aggressive expansion strategy beyond Nigeria’s borders.

Dangote says the company is competitive thanks to its focus on technology, and that it is "the only manufacturer in Africa that uses robotics".

But, to Dangote, cement was a mere stepping-stone to his latest and most audacious project.

He’s now building the world’s "largest-ever" oil refinery in a bid to transform Nigeria from a net importer of refined petroleum into "one of the [world’s] largest exporters of petroleum products by 2020".

It simply makes no sense that the oil-rich country continues to import the finished product when it has the raw material, he says.

"In 2011 and 2012, Nigeria gave subsidies of $30bn in petroleum products, and we are still in the same mess."

Dangote’s $12bn plan is for the refinery to process 650,000 barrels of oil a day, easily more than the current frontrunner, ExxonMobil’s 500,000bbl/day plant in the US.

His mega-plant, which will contribute about 0.7% to global production, will also make plastic and as much as 3Mt of fertiliser a year, again to displace job-killing imports, he says. "Nigeria will be exporting more fertiliser than any African country on record."

The project will require construction of dedicated power and industrial gas plants.

Thanks to Dangote’s efforts — and assistance from the state in the form of import duties — Nigeria is industrialising rapidly.

Manuel, however, challenged Dangote’s stance on import tariffs — after asking why the organisers of Obama’s event seated him, "the poor boy", between Dangote and Collison. "I don’t think it’s going to rub off," he said of their vast wealth.

The idea of "building high walls" around industries so they can survive just means those protected companies "can do anything" to the detriment of consumers, Manuel said.

"Consumers don’t have a choice. Productivity doesn’t actually matter, price doesn’t matter, you can get away with anything, and the people who suffer are actually the poor."

To Manuel, the best way to stimulate industry is with competent and agile administrations — something African governments could have more of. "We need smart people who are entrepreneurs and sitting in government."

On that point, Dangote agrees. "I hope some of these 200 African emerging leaders will go into government, because really in government there’s no capacity at all, and we can only make Africa great if we have some of our best people in government."

Dangote says that while protectionist policies do not make sense for industrialised countries, African countries need them for as long as it takes to build sustainable and robust manufacturing bases. Then they can compete on the world stage.

"I like the story of India. In 1993 or 1994, India had foreign reserves of just one week. Today it’s a totally different country — India has overtaken France as the number six economy in the world. So in Africa, we need to protect our industries."

If Africa doesn’t, it will remain "the dumping ground of the entire world".

"We Africans are the only ones that we need to transform our continent. It’s just going to be done by us … Yes, we want to have foreign investment, but foreign investment will not do the job. We have to show confidence in our own continent," he says.

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