How Dangote Shot To The Top

By Robyn Dixon, Los Angeles Times

Aliko Dangote made his fortune by betting on African growth. Some call him ruthless, but many Nigerians feel he’s brought respect to a nation known more for email scams than manufacturing.

The chaotic color of the megalopolis cascades past the window of his silver Mercedes SUV. A police escort with a flashing blue light clears the road ahead.

Restless and irritated, the billionaire is in his bubble. With a slim, elegant finger, he prods his cellphone screen to redial after the call drops.

He grills a squirming subordinate about a production problem that has persisted all week. The call drops again. A small sigh. He redials.

“The day before yesterday you gave me a different excuse. Let’s see what excuse you will give me today.” His voice is calm, his brow furrowed ever so slightly.

“Go and get your act together, please,” he says. “This matter is a disaster.”

Aliko Dangote is the richest man in Africa. He dwarfs diamond kings, telecom giants and oil magnates, and his estimated $11.2-billion net worth is four times that of Oprah Winfrey’s. His only rival on Forbes’ global list of black billionaires is a Saudi of Yemeni-Ethiopian parentage who recently nudged Dangote from the top spot, thanks to a decline in Nigeria’sa stock exchange.

Dangote’s fortune doesn’t come from diamonds or oil, but from the cement that is helping to fuel Africa’s astonishing growth.

With Europe in crisis and America’s recovery sluggish, Africa is an economic bright spot. Nigeria’s economy has grown about 7 percent a year in recent years, just behind Ethiopia, Angola and Ghana. Although many countries on the continent still struggle, a March 2011 World Bank report says that sub-Saharan Africa “could be on the brink of an economic takeoff, much like China was 30 years ago and India 20 years ago.”

A lot of the growth is driven by China’s need for commodities, oil and gas. But there’s another side to it: the cellphone.

Half a billion Africans own them now, enabling a host of day-to-day dealings between businesspeople small and large that a decade earlier would have been difficult or impossible — money transfers, for instance, or instant access to market prices for produce.

Dangote clicks off his phone. But not for long.

A two-mile line of trucks snakes along a red jungle road in western Nigeria’s Ogun state. At its end, Dangote’s newest cement plant looms above the shabby village of Ibese. The trucks wait for their loads as patiently as cattle.

Dangote, 55, built his fortune on Africa’s prodigious hunger for infrastructure — and cement — expanding rapidly since 2000 despite his country’s chronic bad governance. When the government drags its feet in laying a gas pipeline to service a factory, he builds it. When he needs a road, he does it. Faced with hopelessly unreliable state electricity, he constructs his own power plants for his factories.

He clambered to the top not by looting the country’s wealth, like many of Nigeria’s elected officials have, but by snapping up privatized state enterprises, then expanding and building his own cement factories and other plants, whose output includes such products as instant noodles and prayer mats.

In that sense, Dangote resembles Russia’s billionaire oligarch class, which got rich when the state sold off assets after the collapse of communist rule. His close links with Nigeria’s political elite gave him an inside line when state assets were privatized — a process that, like Russia’s, has been criticized as opaque and corrupt.

Critics call Dangote ruthless, and accuse him of aggressive price cutting to drive smaller rivals out of business.

Unlike Nigerian businessmen who stripped state companies of their assets and let them collapse, Dangote turned them profitable, politician Junaid Mohammed said. “The question is whether he was entitled to the businesses at the price he got them and on the terms,” he said.

“Let us not be naive: A lot of everything that happens in life depends on connections. Your fortunes depend on who will be able to open the door for you.” (Los Angeles Times)

  1. charles Reply

    He has made Nigeria and Africa proud. God bless him for the job opportunities he created.

    • Alaa Reply

      I always like your cauoutis optimism to issues Nigerian (except maybe UMYAwn’s performance index) but in this case I think Nigeria is actually doing much better than is being reported.As for the Internet penetration in Nigeria, I think the focus of the world had been too much on the negative stuff -419 and the like – rather than on the tremendous growth taking place in the ICT industry in the past decade.Case in point, the Glo Submarine cable is actually the second in Nigeria, we have had SAT-3 connection for over five years now. A third cable by Main One is expected to be completed by Q4 2010. These are indigenous companies.The nationwide fiber optics cables being managed by Alheri and Phase3 have actually been laid -but not completed- so many years ago by NEPA (now PHCN).Ironically, the only thing holding back Nigeria’s ICT development right now is power – electrical power. WHEN we eventually get that right, then we will have arrived. Let’s hope it happens before 2011.

  2. Victor Reply

    I do not what Dixon is trying to insinuate with this statement
    “In that sense, Dangote resembles Russia’s billionaire oligarch class, which got rich when the state sold off assets after the collapse of communist rule. His close links with Nigeria’s political elite gave him an inside line when state assets were privatized — a process that, like Russia’s, has been criticized as opaque and corrupt.”
    But i know that the bidding process for privatized government property has been acceptable to Nigerians and government has is some instances reclaimed properties that were deemed not sold following the procedure. So the issue of insider information does not come to play here. Dangote is a Business man and like every other business all over the world including USA have some sought of Government relations, Companies do hire lobbyists in the USA to ensure their interest is taken care of so what is wrong if Dangote relates with Government to ensure the smooth running of his business. There is Ethics issue in how Dangote runs his business empire. He remains one of the 100 richest people in the world. He is a proud Nigerian with indigenous management and leadership skills.

  3. Victor Reply

    I do know not what Dixon is trying to insinuate with this statement
    “In that sense, Dangote resembles Russia’s billionaire oligarch class, which got rich when the state sold off assets after the collapse of communist rule. His close links with Nigeria’s political elite gave him an inside line when state assets were privatized — a process that, like Russia’s, has been criticized as opaque and corrupt.”
    But i know that the bidding process for privatized government property has been acceptable to Nigerians and government has is some instances reclaimed properties that were deemed not sold following the procedure. The issue of insider information does not come to play here. Dangote is a Business man, and like every other business all over the world, including USA, have some sought of Government relations, Companies do hire lobbyists in the USA to ensure their interest is taken care of. So what is wrong if Dangote relates with Government to ensure the smooth running of his business. There is NO Ethics issue in how Dangote runs his business empire. He remains one of the 100 richest people in the world. It is mischievous and unprofessional for Dixon to insinuate that there is an aspect to Dangote’s wealth that is shady.

  4. Jordan Reply

    This is good news but its good news only for a sector of the Nigerian polaupce. The market women of Oja Oba, Ilorin and their hungry children who crawl on the streets, will be wondering if you are speaking spanish if you inform them that our IT capacity is about to explode. The almajiris of Sokoto couldn’t care less, unless you tell them that the fibre optic cables are wiring cash straight to their begging pans.And to butress the point others have made, no point in having faster internet if you dont have light to charge your phones and laptops.I am always happy to hear about progress in Nigeria but am concerned about the levels of poverty and corruption. It is my prayer that somehow the coming of these improvements in our IT sector will set off a chain reaction that will eventually bring down the twin giants of poverty and corruption in Nigeria…..somehow

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