Who is Aliko Dangote?
Aliko Dangote is the CEO and founder of the Dangote group. The Dangote Group is one of Nigeria’s most diversified business conglomerates with a reputation for excellent business practices and products’ quality with its operational headquarters in Lagos, Nigeria. He is also the CEO of the Dangote foundation which is involved in many charitable activities.
The Dangote refinery and Petroleum Project
The Dangote refinery and Petroleum Project is an $18 billion project by the Dangote group being constructed at the Ibeju-Lekki axis of Lagos State, Nigeria. The refinery complex which includes a refinery, petrochemical plant, a fertilizer plant and a subsea pipeline project, is the largest in the world.
With a 650,000 barrels per day capacity and 838 KTPA Polypropylene plant, the refinery segment of the business on completion will become the largest single-train petroleum refinery in the world.
Why Dangote is an inspiration to African entrepreneurs?
The refinery being built by the Dangote group could be one of the most important business investments in Africa since independence. This is because by Dangote building the refinery he is disrupting foreign domination of African resources. Since independence Africa has just been a resource supplier to the rest of the world. Most African countries just export primary products to foreign markets be it oil, minerals, metal and agricultural resources.
No wonder Africa is the poverty capital of the world today. Since the countries practically add no values to their resources. Dangote is telling African entrepreneurs that you can also process your natural resources right at home.
Why the Indigenous African business community should follow in Dangote’s footsteps?
If the refinery Dangote is building was to be constructed by the Nigerian government, it will cost at least four times more and take at least twice longer to complete. The final nail in the coffin will be the refinery going under within few years of operations due to corruption and neglect from the government. Similar to how all previous Nigerian refineries went under. Certainly, this is proof that it is the indigenous African entrepreneurs who should kick-start the industrialization of their economies.
Dangote is proof that the indigenous African Business community should invest in industries
African countries are not maximising the full value chain of their resources. The majority are just stuck at the primary level of resources extraction. For example, when it comes to the oil and mining sector, African governments are just contented with foreign multinational extracting resources for quick bucks. Similarly, in the agricultural sector, they are not supporting farmers to add value to their agricultural resources.
Due to the above reasons, African entrepreneurs must venture into the industrial sector to help lift their fellow citizens from the poverty trap. This is exactly what the Dangote group is doing.
Why African governments must encourage the indigenous business community to participate in their own economies?
It is great to see that African countries in the past 5 years have realised that investments are key to national developments. Hence, various investment forums are being organised both within and outside Africa. Whilst this a commendable venture, African governments are not doing enough to encourage local investments. Encouraging investments from the indigenous local business community is the most important step for any country to grow her economy. There are several reasons for these.
Firstly, local investments will keep their revenues and profits inside the home country given the right environment. Similarly, they would also pay taxes to their economies further generating revenues for the governments. For example, Dangote cement Plc pays more than half of its revenues as taxes to the Nigerian economy.
On the other hand, there are several reports of multinational companies participating in capital flights by evading taxes in Africa. It has been reported that Africa loses more than $60billon in revenues annually due to capital flight.
Secondly, Local African businessmen if encouraged by their governments will further invest their profits in other sectors of the economy.
Thirdly, they will provide more employment opportunities through their investments. For example, the Dangote group is the largest employer after the government in Nigeria. Fourthly, they will inspire their fellow citizens to also be entrepreneurs. This will bring a positive shift in the mindsets of Africans that they can become prosperous inside their home countries.
To top it up, when foreign investors see that the locals are investing heavily in their economies, they would be encouraged to follow suit. Finally, all the above reasons will synergistically interact to lift the economy of the nation to prosperity.
Do you believe that the African business community in other countries can follow in Dangote’s footsteps? How can the African business community persuade their governments to create an enabling environment for local investments?
Share your thoughts below.