The Dangote Group has emerged the most impactful player on Nigeria’s struggling economy. Its activities touch the five anchors of wealth creation: investment, employment, revenue, export and infrastructure in diverse ways.
By this, the firm has reduced the vulnerability of the economy to crisis, and raised its potential for growth. This is why Alhaji Aliko Dangote, Founder and Chairman/CEO, Dangote Group Limited, is THEWILL Newspaper’s Icon of The Year 2022.
The Nigerian economy has shown increased vulnerability since 2014 when it suffered the shock of the global oil crisis in the international market. Several disturbing developments have occurred which exposed the economy to further growth constraints. These include recessions, the 15-month border closure, insecurity, COVID-19 pandemic and, of recent, the global impact of the Russia-Ukraine conflict. During these periods, the economy was exposed to the vulnerability of intense headwinds that impacted all sectors amid worrying policy directions.
While foreign investors cringed with waning confidence in the domestic economy, the Dangote Group, Nigeria’s foremost indigenous conglomerate, stepped up activities in line with its vision of being a “world-class enterprise that is passionate about the quality of life of the general populace and high returns to stakeholders.” It also walked its mission: “to touch the lives of people by providing their basic needs.” This traversed its subsidiaries in Cement Manufacturing, Sugar Milling, Sugar Refining, Port Operations, Packaging Material Production, Salt Refining, Oil Refining, Fertilizer Production, Petrochemical, Agriculture and Telecoms. With higher stakes in the economy, Nigerians feel the presence of Dangote in their daily lives – by consuming its goods and services, or earning income in direct or indirect employment. This is because the main drivers of growth in Nigeria – oil production and services – do not usually benefit most Nigerians in terms of jobs and business opportunities due to limited linkage.
For instance, to significantly reduce the importation of sugar into the country by 40 per cent, and pave way for the employment of over 30,000 youths, Dangote Group embarked on Phase II of its Sugar project, covering over 100,000 hectares of farmland in Tunga, Awe Local Government Area of Nasarawa State,
The integrated sugar complex, which is the largest sugar plant in Africa comprises 60,000ha sugar plantation and two sugar factories with the capacity to produce 430,000 tonnes of refined white sugar annually. The Group had announced a commitment of $2.3 billion aimed at boosting agriculture in Nigeria’s northern states, to be spent over a three-to-five-year period to boost food production amid rising insecurity.
Data from the Nigerian Exchange disclosed that Dangote’s major subsidiary, Dangote Cement, ranked top among the 157 quoted companies on the Nigerian Exchange (NGX)’s major growth parameters as of December 31, 2021 (the last FY annual reports): Dangote Cement ranked the most profitable company in Nigeria – N364.44 billion. With Dangote Sugar Refinery’s N22.05 billion, the Group’s quoted subsidiaries recorded N386.49 billion, raising the bar much higher above the others.
Dangote Cement also emerged as the most capitalised on the NGX with N4.37 trillion, or N4.6 trillion combined with Dangote Sugar Refinery. Dangote Cement also has the largest employees among the quoted firms, with 16,700. Dangote group has over 30,000 employers, making it the highest employer of labour in Nigeria after the government. Furthermore, Dangote Cement alone ranked top in company income tax payment with N173.93 billion in 2021. The PAYE of over 30,000 workers singles the Group out for a remark.
A report by the NGX in May 2022, disclosed that investors in the Nigerian capital market earned over N1.1 trillion from dividend payout by companies listed on the NGX in 2021, with Dangote Cement N340.8 billion topping the list.
“Dividend payment is one of the very few ways available for investors to earn a constant stream of income and shows the prosperity of a firm. “Dangote Group has always delighted its shareholders with reasonable return on investment. A big dividend shows the prosperity path of a company. It resonates in the growth of the economy, ” says Adebayo Sodeinde, a stock broker. Sodeinde added that the $16 billion Dangote refinery in Lagos will drastically reduce Nigeria’s dependence on imported fuel when it becomes operational by mid-2023, thereby fast-tracking economic development of the country.
The amazing story of Aliko Dangote is not that he is rich, but that he is richer than many people know. Dangote is the most popular Nigerian today because his products and businesses are everywhere. “You can’t consume anything in Nigeria today without having at least one Dangote product as an ingredient in it. There is Dangote sugar, salt, macaroni, noodles, seasoning, rice, juice, water, just to mention it. People now travel on roads built or rehabilitated by Dangote Group or with its products. Very soon, fuel will follow,” Ekemenah Johnson, an investment analyst said.
The Dangote Group is the largest conglomerate in West Africa and one of the largest on the African continent. The company was founded in 1981 as a trading enterprise, importing sugar, cement, rice, fisheries and other consumer goods for distribution in the Nigeria market. The group which moved into manufacturing in the 1990s, now owns and operates over 18 subsidiaries. Its focus is economic self-reliance through domestic production, consumption and export.
“Our core business focus is to provide local, value-added products and services that meet the ‘basic needs’ of the populace through the construction and operation of large scale manufacturing facilities in Nigeria and across Africa. “We are focused on building local manufacturing capacity to generate employment, reduce capital flight and increase local value addition,” the company said, as it restates its capacity to wealth-creating opportunities for Nigerians. Aliko Dangote presides over a complex conglomerate that spans different sectors across Africa. According to Bloomberg Billionaires Index, Dangote’s net worth is estimated at US$19.1 billion as of 29 November 2022, making him the richest person in Africa and the 75th richest person in the world.
The Nigerian billionaire business mogul also topped the 2022 list of Africa’s richest persons for the 11th year in a row, Forbes magazine said in a report in January 2022. It disclosed that Dangote’s wealth jumped from $12.1 billion last year to an estimated $13.9 billion. The magazine attributed the growth to a 30 percent increase in the stock price of Dangote Cement, his most valuable asset. “A surge in housing developments in Nigeria and growth in government infrastructure spending drove higher demand in the first nine months of 2021,” the magazine had said.
Dangote was born in Kano State on April 10, 1957 into a very prominent business family and is the great-grandson of Alhaji Alhassan Dantata, the richest African at the time of his death in 1955. He started business at a very early stage. Dangote, who clocked 65 last year, is a towering giant in Nigeria’s socio-political and economic landscape. He is the first Nigerian non-public office holder to be awarded Nigeria’s second highest honour, the Grand Commander of the Order of the Niger (GCON), only a rank away from the nation’s president, who is normally the Grand Commander of the Federal Republic (GCFR). “I can remember when I was in primary school, I would go and buy cartons of sweets and I would start selling them just to make money. I was so interested in business, even at that time,” Dangote once said.
This suggests that he is treading the path which destiny cut out for him as he is reputed for crossing the borderline in strategic corporate philanthropy.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.