Africa’s Richest Man, Aliko Dangote, Is Just Getting Started

Africa's Richest Man Alhaji Aliko Dangote
Alhaji Aliko Dangote

AFRICANGLOBE – Six years ago, Aliko Dangote paid a visit to Tanzania, on Africa’s eastern coast, and shared his dream of having an African-run business empire that would manufacture products all over the continent. To assorted government and business leaders, he announced that he was prepared to make an investment of $600 million to build a cement factory in southern Tanzania, alleviating the shortage in that country’s domestic cement supply.

The Tanzanians were skeptical. “They didn’t believe us at all. They thought I was one of these ‘Nigerian 4-1-9’ scammers who try to go and scheme people out of their money,” Dangote says. “Or just one of these clever Nigerians who would come and be lying to them.”

The Tanzania story is clearly one Dangote relishes telling—not least because of how it’s turning out. Not long after his visit, his name appeared on a list of the world’s wealthiest people, and the Tanzanians realized they had been negotiating with Africa’s richest man. As founder and chairman of Dangote Group, he’s worth an estimated $16.3 billion. “They pieced the two together,” Dangote says, sitting in his expansive Lagos office in late January. The room is so gigantic it appears nearly empty, even with tall plants, a conference table, and a large-screen television. Three months ago, Dangote Cement signed a final agreement there, with plans to produce 3 million tons of cement a year.

Dangote Cement is Africa’s largest cement manufacturer; the Dangote Group employs 26,000 people in Nigeria alone. The company is constructing cement plants in Ethiopia, Zambia, South Africa, Senegal, Cameroon, the Republic of Congo, and several other African countries. “We want to be predominately in Africa, and then we will move out of Africa,” he says. He announced plans last fall to construct plants in Iraq and Burma.

Dangote Group also mills flour, processes salt, produces fertilizer and pasta, and has big plans for sugar. The Nigerian sugar refinery, located at the port of Lagos, is the second-largest in the world. “The same revolution that we’ve had in cement, we want to replicate in sugar,” says Dangote, referring to his push to increase domestic production of a legacy import.

Despite being one of the world’s top producers, Nigeria has yet to refine its own oil. Dangote wants to build a $7 billion facility that would annually process 400,000 barrels of petroleum. “When you look at most of what we’re consuming today, these are things that are being imported,” Dangote says. “We want to make sure that our people are self-sufficient in terms of producing more. The market is there for us to take, but the production is not there.”

Because of his success and vision, his partners, friends, and admirers hold Dangote up as the face of the new Nigeria. With corruption on the wane and the economy liberalizing, Nigeria, they say, is safer than ever for foreign investment. And Dangote’s profile does appear to be contributing to greater confidence in the country. Goldman Sachs included Nigeria in its Next 11 list of the most promising 21st century economies, and Citigroup called it a “3G,” one of its “global growth generators,” countries with growth potential and investment opportunities. Dangote’s critics—who are not hard to find, if reluctant to speak publicly—say he hasn’t created a model for the future but simply found a way to play a still-rigged game better than others.

Dangote, 55, is a household name in Nigeria and is seen as both a son of privilege who benefited from family connections and a striver who has earned his unprecedented wealth. A workaholic—other businessmen gossip that he rarely sleeps and never vacations—he spends about half his time in Nigeria and the rest traveling around the world. He’s married with three adult children.

“He’s charming and humble, but he’s hard to pin down,” says Theresa Okeke, the American director of Lagos’s Civic Centre, a recreational center for the well-to-do. He’s also a favorite among the moneyed set that circulates through the polo and boat clubs and extravagant mansions of Ikoyi and neighboring Victoria Island, enclaves separated by a bridge from the rest of Lagos. (Recently, the French liquor brand Veuve Clicquot said it plans to open an office in Lagos; some upper-class Nigerian families like to hand guests their very own yellow-labeled Champagne bottle at parties.)

Dangote was born in Kano, the largest city in Nigeria’s mostly Muslim north, to a family of prosperous merchants. “I’m from a family that has been in business for a very long time; it’s in our blood,” he says. “But I did not ride on the back of my family to make money. I started everything by myself through hard work and didn’t inherit a dime. The only asset I inherited from my late father [an undisclosed sum of money], I donated to charity.”

After graduating from Egypt’s Al-Azhar University with a business degree in 1977, he did, however, receive a loan of a little more than $3,000 from his uncle to start a trading enterprise in food staples, including rice and vegetable oil. He made the most of it, and four years later moved into transport, buying trucks and importing goods such as cement.

During the first two decades of his career, in the 1980s and ’90s, Nigeria went through a series of military coups and dictators who held a firm grip on the economy. Dangote says that made doing business difficult, but with the election of Olusegun Obasanjo as president in 1999, he saw his chance to become an industrialist. He spent the first half of the 2000s restoring a cement plant in Obajana, north of Lagos, that would become his flagship factory.

When he started cement trading in 1978, Dangote was concerned he would not be able to compete with Lefarge, the French multinational that had been the dominant cement supplier for decades. But he didn’t doubt the market’s potential. Before Dangote Cement, Nigeria was consuming 10 million to 15 million tons of cement every year, while Lefarge was manufacturing less than 1 million tons domestically. The rest was imported. Dangote now has plants across the country producing 20 million tons of cement, and he exports to Ghana. He plans to produce 15 million more in Nigeria by the end of 2014.

Uzoma Nwankwo, managing director and chief executive officer of a private equity fund and Dangote Group’s former director of corporate finance, recalls Dangote coming to see him when Nwankwo was still head of risk at First Bank Nigeria. Dangote was transforming his trading company into a manufacturer and had solicited a loan from the bank, among others. “Because he was going into manufacturing, we could see the potential and had a lot more confidence, but [we] worried if he would have enough money to pursue this dream,” Nwankwo says.

When Nwankwo joined Dangote Group in 2005, the conglomerate was heavily in debt and, at one point, owed more than 50 billion Nigerian naira ($316 million in today’s dollars). “Fifty billion naira in 2005 was a lot of money to owe,” Nwankwo says. “We used to joke that when you see the banks are calling, you just drop the phone. Because they were just going to ask, ‘When are you going to pay us?’ ” Nwankwo says. “But he’s smarter than a lot of people give him credit for.”

Part Two