“We want to make sure every single steel that we use will come from Nigeria” Aliko Dangote
“What I keep telling people is that, as Africans please don’t be deceived, no foreigner can come and make your continent great. It must be the domestic investors because domestic investors are what attract foreign investment” Aliko Dangote
With the above two quotes made by Africa’s richest man, Aliko Dangote at the Afrexim Annual Meetings and AfriCaribbean Trade and Investment forum in Nassau, The Bahamas, he not only announced his intention to go into the steel production business, he also confirmed to the world that he is on an African renaissance mission in which he intends to lead the charge of Africa’s industrialization while encouraging other Africans to follow suite.
However, Dangote’s quest to industrialize Africa is not a new thing as he already revealed his African outlook with his cement manufacturing business which is now operational in ten different African countries.
The story of Aliko Dangote’s rise to African dominance and global recognition is also very interesting. Prior to the establishment of the cement factories, Dangote had been a major importer of cement and other fast-moving commodities such as rice, salt, sugar, and wheat. However, during Obasanjo’s first term as president being worried about Nigeria’s huge import bill, especially the $3 billion spent annually on importing cement into the country, he invited Aliko Dangote and other major importers of cement in the country to deliberate with them on how government could support them to start manufacturing cement locally instead of importing since virtually all the raw materials needed to manufacture cement were locally available in the country.
The outcome of the deliberations was the “Cement Industry Policy” of the Obasanjo administration which provided some incentives for local manufacturers of cement to tap into. Being one of the architects of the policy and with a very good knowledge of the potential of the cement industry in Nigeria, Aliko Dangote took advantage of the policy and decided to invest heavily in cement production starting with a huge factory complex in Obajana which was built to be the biggest cement factory in Nigeria.
While the Obajana factory was still under construction, he proceeded to buy Benue Cement Company which even though moribund at the time was one of the biggest cement manufacturing companies in Nigeria. As if the two major investments in Obajana and Benue Cement Company were not enough, in an audacious demonstration of belief in the potential of the Nigerian cement industry, Dangote started building another major factory at Ibese in Ogun state as soon as the Obajana factory was operational in a bid to singlehandedly build enough capacity to meet Nigeria’s annual cement needs.
With the completion of the Ibese factory, Dangote set his sights on Africa and started exporting cement to neighbouring African countries while simultaneously building cement factories in ten different African countries which signalled the beginning of his African renaissance quest. With the completion of the ten cement factories across Africa, Dangote firmly established himself as the leading cement manufacturer in Africa and eliminated the need for African countries to import cement from outside the continent.
With his success in the cement industry, Dangote set his sights on the downstream sector of the Nigerian petroleum industry. Despite being the biggest producer of crude oil in Africa, Nigeria for decades had been importing refined petroleum products as a result of the lack of local capacity to refine crude oil in adequate quantities.
Despite the size of the Nigerian market being huge and the government not having the capacity to build refineries that would adequately service the Nigerian market, Dangote did what many well-established Multinational oil companies were shying away from.
He decided not only to build a refinery that could meet Nigeria’s huge demand for petroleum products, but he set his vision on Africa by building a refinery that with enough capacity to supply some neighbouring African countries after meeting up with the Nigerian demand and this resulted in the development of the biggest single chain refinery in the world which is indeed an unprecedented feat for any African entrepreneur or government.
With the completion of the refinery which includes a petrochemical complex, Dangote now exports diesel and aviation fuel to Europe and other African countries as he sets his sights on being the major supplier of aviation fuel in Africa even as he gets set to take over the $10 billion per annum petroleum market in Nigeria. In the next year, Dangote Industries is expected to make over $30 billion in group revenues which would exceed 12% of Nigeria’s GDP and make it one of the top 100 biggest companies in the world in terms of revenues but the enigmatic Aliko Dangote is not about to rest on his oars.
With Dangote’s declaration at the Afrexim Annual Meetings of wanting to ensure that Nigeria becomes self-sufficient in steel production, he has announced to the world that his sights are now fixed on dominating the steel industry in Nigeria and by extension the rest of Africa.
Given his track record in the cement and now the petroleum industry, no one should be in doubt about Dangote’s capacity to transform the steel manufacturing industry in Nigeria which has been characterized by the moribund Ajaokuta Steel Company Limited which was initiated by the Nigerian government in 1979 and is yet to start production forty-five years later after gulping over $7 billion worth of investments.
With Aliko Dangote’s expressed interest in investing in the country’s steel manufacturing industry, the moribund Ajaokuta Steel Company Limited appears to be the obvious launch pad for an industrialist of his capacity to start his foray into steel production and he might just be able to provide the elixir that the company needs to jump to life and start producing to meet our construction and industrial needs across Africa.
Sources close to Dangote also indicate that he is thinking of investing in the power sector of the economy which has proven to be a huge challenge for the Nigerian government to fix with it’s attendant consequences on the Nigerian economy. It is worthy of note that with a daily power generation capacity of 1,500 MW, Dangote Industries is already the biggest power producer in the country which manages to produce and transmit just over 4,000 MW of electricity to the national grid daily.
However, the power being generated by the Dangote group is for powering its own operations and is not available to the public for commercial use. But with the group’s experience of being Nigeria’s biggest power producer, it certainly won’t be a problem for them if they decide to go into commercial power generation services to take advantage of the huge unmet demand in Nigeria’s power sector while at the same time furthering Aliko Dangote’s ambition of developing Africa, starting with Nigeria.
With the successful completion of Dangote’s mega refinery, he has demonstrated to the whole world that Africans indeed have what it takes to develop their continent and he has also shown the way for other African entrepreneurs to follow suit. With more entrepreneurs emerging in the mould of Dangote, Africa’s industrialization drive would certainly be fast-tracked and the African story would change for the better.
Oshobi, a development economist, management consultant, and author writes from Lagos, Nigeria.