Dangote: Manufacturing Holds Key to Prosperity Not Trading Economy

■Warns import-dependent economy will impoverish Nigerians, stifle jobs 

Mary Nnah

President of Dangote Group, Alhaji Aliko Dangote, yesterday said the country risks remaining trapped in poverty unless it abandons its heavy dependence on trading and imports in favour of manufacturing and domestic production.

He stressed that no country had achieved lasting prosperity by selling what others produce.

Dangote spoke at the 25th Annual Conference of Women in Management, Business and Public Service (WIMBIZ), in Lagos.

He said the country’s continued celebration of trading at the expense of industrial production was undermining job creation, wealth generation and economic self-reliance, while policy inconsistency and inadequate electricity supply had made manufacturing increasingly difficult for local entrepreneurs.

Aftica’s richest man, in a keynote address titled, ‘The Geography of Opportunity: Why the World Needs What Africa Has’, further challenged Nigerian businesses, particularly women entrepreneurs, to move beyond conventional trading into production, processing and other value-adding activities, insisting that Africa’s enormous natural and demographic advantages would remain largely untapped without deliberate investment in industrial capacity.

He recalled his transition from trading to manufacturing, adding that the decision was driven by the realisation that the country’s business environment, particularly unreliable policies and poor power supply, had made industrial ventures difficult to sustain.

He explained that a retreat by his group challenged its management to abandon dependence on import licences and embrace backward integration by producing locally what it had previously imported.

That strategic shift, he said, laid the foundation for the group’s expansion into cement manufacturing and other industrial activities, demonstrating how domestic production could reduce import dependence and improve competitiveness.

Dangote cited the group’s cement operations as evidence of the benefits of industrial investment, noting that Dangote Cement had developed a robotic manufacturing plant and achieved production costs below $2.40, which he said were lower than those of Reliance Industries in India.

He also recounted the challenges surrounding the construction of the Dangote Refinery, which he said was initially dismissed by many international players as unrealistic.

According to him, some global contractors declined to undertake the project, while financial institutions were reluctant to support what they considered an excessively ambitious investment.

Rather than abandon the project, Dangote said the group assumed the role of its own engineering, procurement and construction contractor, taking responsibility for delivering the facility.

He disclosed that the refinery’s initial design capacity of 300,000 barrels per day was subsequently expanded to 650,000 barrels and eventually 700,000 barrels per day.

The industrialist further revealed that the group continued servicing $720 million in loan obligations every six months during the COVID-19 pandemic without securing repayment extensions, despite interest rates rising to as high as 40 per cent.

He described the experience as a lesson in the importance of understanding an investment, taking calculated risks and remaining committed to long-term objectives despite opposition and uncertainty.

Dangote said Africa could not afford to approach its economic future with limited ambition, particularly as the continent prepares for a major demographic transformation.

He noted that one in every four people globally would be African by 2050, yet the continent currently accounts for less than three cents of every dollar of global output.

He attributed the disconnect to inadequate planning, capital flight and the failure to convert Africa’s natural resource advantages into productive industrial capacity.

According to him, Africa possesses about 60 per cent of the world’s arable land and more than 37 per cent of critical minerals, but continues to underutilise these resources.

Nigeria, he added, cultivates less than 10 per cent of its arable land, despite growing global demand for food and agricultural products.

Dangote also said that agriculture, food processing, manufacturing and port infrastructure would become increasingly strategic to Africa’s economic future, particularly as Europe and other regions look beyond their borders to secure food supplies.

Dangote urges women to retain capital, understand investments

Dangote also urged women entrepreneurs to retain their capital within Africa and exercise greater care in choosing investment opportunities, warning against committing funds to businesses they did not fully understand.

He advised them against allowing consultants and professional managers to dictate their business ambitions, insisting that entrepreneurs must understand their investments and maintain control over their long-term vision.

Dangote also cited the recent public offer by his group as evidence of the appetite for African investments when businesses inspire confidence and offer accessible investment opportunities.

He said the offer, valued at $2.5 billion, attracted demand of $3 billion, with applications coming from all 54 African countries and investors from about 200 countries.

According to him, the response demonstrated that Africans and international investors were willing to commit capital to businesses on the continent when trust and confidence were established.

He said the challenge was to replicate such confidence across the wider African economy by mobilising domestic capital for productive investments.

Dangote maintained that Africa’s economic transformation would depend less on the opportunities available to it than on its willingness to develop the capacity to exploit them.

He urged women and other business leaders to embrace ambitious ventures, take calculated risks and invest in sectors capable of generating jobs and building enduring wealth.

He stressed that industrialisation required persistence and long-term commitment, warning that countries could not achieve sustainable economic development by remaining dependent on trading and importing goods produced elsewhere.

Women must move beyond survival businesses

However, Lagos State Deputy Governor and All Progressives Congress (APC) governorship candidate, Dr. Kadri Obafemi Hamzat, who also spoke at the conference, said the exclusion of women from affordable financing was limiting the productive capacity of the economy.

Citing World Bank data, Hamzat said women own about 40 per cent of Nigeria’s micro, small and medium enterprises (MSMEs), but face significantly greater financing constraints than their male counterparts.

He disclosed that 52 per cent of women-led businesses identified access to finance as a major constraint, compared with 30 per cent of male-led enterprises.

Similarly, 56 per cent of women were rejected for their most recent loan applications, against 17 per cent of men.

Hamzat stressed that the disparity went beyond gender considerations, warning that restricting women’s access to capital also deprived the economy of businesses, jobs, innovation and competitiveness.

He said Lagos needed to move beyond celebrating women’s resilience to dismantling the structural barriers preventing their businesses from growing.

Among the constraints he identified were multiple and unclear charges, complicated property registration procedures that limited women’s ability to use land as collateral, and government interventions that failed to track whether women were actually benefiting.

Hamzat said his proposed Lagos Promise would address the challenges by ensuring that women-led businesses account for at least 57 per cent of beneficiaries under every state enterprise programme, with results publicly disclosed and audited.

He also pledged to expand access to affordable financing through cooperatives, offering loans of up to N10 million at nine per cent interest annually without collateral.

Other proposed interventions include simplifying regulatory compliance, reducing harassment of traders who meet their lawful obligations and connecting women-owned businesses to industrial parks and opportunities under the African Continental Free Trade Area (AfCFTA).

He said the objective was to help women-owned enterprises graduate from small-scale trading into production, processing and export-oriented businesses.

Hamzat cited the Lagos Export Readiness Programme, where 189 of the 253 participating SMEs were women-owned, while 16 of the 20 selected trade champions were women.

He also pointed to skills development and micro-enterprise initiatives that had reached tens of thousands of women, stressing the need for improved data to ensure that economic policies and public spending reflected women’s actual contribution to the economy.