Aliko Dangote Unscripted: The gravest
danger confronting Nigeria
*Speaks on plan to build $8bn refinery
BY JIDE AJANI
He could pass for just any other guest. But he is
unmistakably familiar. Charming but humble!
Stupendously wealthy, yet radiates simplicity.
Strolling in, unassuming, was Africa’s richest man.
It was his birthday. Dressed in a black suite with a
black shinny cock shoe to match, Aliko Mohammed
Dangote kept his appointment for 9am.
Unlike the rambunctious entry of Nigeria’s men of
means and power, Dangote walked in with just a
few of his executives. After the informal
handshake and introduction, he grabbed the
microphone to make some opening remarks which
turned out not to be mere remarks. He made
earth-shaking revelations about his person, the
conglomerate he runs (Dangote Group), the
Nigerian economy and how things can get better
in a very competitive environment of clashing
political and socio-economic interests.
At first, the tempo was cool – the usual
compliments of not having time to rub minds,
examine developments in the country with a view
to proffering solutions – and the usual
pleasantries, until Dangote explained that the
real danger confronting the Nigerian state is the
infrastructure deficit in a country where the
population growth has choked existing facilities.
He made it clear that the problems confronting
Nigeria today did not just start – they are a
cummulation of many years of misgovernance and
lack of vision. Shall we blame President Goodluck
Jonathan? No!
On the Economic Management Team of President
Jonathan, Dangote explained that the team is
working hard to ensure that good policy
frameworks are put in place with a view to
building a more prosperous nation. The EMT is as
bothered as President Jonathan to bequeath a
better economy to Nigerians.
But, at the point when Dangote said the danger
posed by infrastructure deficit is far graver than
the Boko Haram threat, all heads turned in his
direction.
Mind you, his audience was a group of select
senior journalists in Nigeria.
“Why should we in Nigeria, blessed with many
mineral resources, be where we are”, he asked?
“The mineral resources we have can replace and
be better than the crude oil. “Some ask where
the minerals are but they are there.
“Even in the Economic Management Team, EMT,
we ask and look for ways to make it possible to
clear goods from the ports within 48 hours.
“But I say it would not be possible and the cost
adds to everything. “To clear a container in Lagos
it would take about $1000 but in Brazil where
they are not even efficient, it costs less than $100
to clear the same container.
“The issue which people seem to forget is that
the last port we built in Nigeria, the Tin Can
Island Port, was built in 1978 – look at the
population of Nigeria at that time, the size of the
economy, crude oil was being sold for about $9
and compare with the expansion of the economy
and the population and people think we should
still manage with the same facility?
“God forbid, some people were expressing fears
about Third Mainland Bridge; God forbid I say,
should something happen to that bridge, how
would people move around in Lagos? Look at how
difficult it is for people to move around now and it
is being said that by 2020 Nigeria’s population
would be about 200 million”.
Our Investments, Our Vision
“Before we were making money from our other
businesses like sugar, salt, flour and putting the
money in cement but by 2010 we were able to
pay all the banks.
“I don’t have any issue with government raising
money, that is, loan, so long as it is spent well.
Beyond the issue of Boko Haram and insecurity,
the greatest threat that confronts us is the threat
of decaying and decayed infrastructure. And this
is not just in Nigeria but in all of Africa, the
greatest threat is infrastructure”.
Decayed Infrastructure, The Greatest Threat
“Somebody was asked how he would operate in
government and the person said he would face
only two things – infrastructure and education.
And he was asked what about the rest. He said
with infrastructure, other things would follow.
“This is what I think confronts us as the greatest
danger even beyond Boko Haram”.
His audience laughs but he charges back with
bluntness: “No! It is true.
“The biggest problem of anybody is when you
taste money; you were once rich and then you
become poor. It is very bad. Nothing can be
worse than that.
“It is when that money goes that you’ll see the
true colour of everybody – your wife, your
children (a round of raucous laughter)
Alternative To Crude Oil
“If today oil prices collapse, do we have
alternatives?
“I tell people that we do. Some of us may be
manufacturing in our own little way, but in a very
big country like Nigeria with its population, that is
simply not enough.
“We are heavily into cement – meanwhile
limestone is the cheapest of all the mineral
resources we have. There are other minerals that
are even more lucrative and more profitable that
government is looking to exploring.
“The problem is that even when you begin to
explore, how do you move the goods around.
“We’ve also been talking about new ports but
there are challenges”.
Scavengers On The Loose
“Look, let me tell you what we have in Nigeria:
We have scavengers who hold licenses but wait
and do nothing. People just grab opportunities
and wait to see what happens rather than
operate with the licenses “Government has
issued 19 licenses for refineries and everybody is
holding the licenses and claim that they are
waiting for foreign investors. Mind you, the
foreign investors are not fools”.
The Role of Foreign Investors
“Foreign investors did not build South Korea –
South Koreans developed their country; the
Germans built their economy, an economy that
was once in ruins. The Germans suffered a lot
but now they are the best.
*Dangote
“What foreign investments are we getting?
“Meanwhile, Sanusi Lamido has done his best by
holding inflation down, holding exchange and
interest rates down; because in an economy that
does not export much, the best you can do is to
have a strong currency so that life would be a bit
easy. Though interest rates may be high but that
should not stop a business from operating.
“When we were building Obajana Cement factory,
we were paying as high as 42% interest rate at
some point in 2004/2005 – some banks charged
that much and we didn’t pay dividends for some
eight or nine years; but after sorting out our loans
we paid the accumulated dividends. “The foreign
investor I would prefer is the one that goes to
Ekiti for instance and sets up a factory because
even if the investor wants to leave Nigeria, he
would sell off his investment but the ones
investing in our bonds can just wake up one day,
re-discount it and just leave because our rates
are fine”.
Concessioning
“If you concession, it is not a bad idea because
government can not do everything. In Dubai and
some other more developed economies, that is
what is happening. I was reading some paper in
Dubai during the week and the leader of the
country was thanking the transport authority for
saving the government $60 billion over a period of
five years – meanwhile, the savings was calculated
in form of man hours.
“If you look at those who work with us for
example, the drivers, they bear so much. Imagine
someone who leaves his house by 4 or 4:30 am and
does not return home until 10 or 11pm! How
would he have time for himself and the children –
and these things come round to create an
environment that is not overall conducive for
upbringing of a child. “There is hope if we do the
right things. “It does not matter who provides the
service; the people would be willing to pay”.
The Future Is Brighter
“If you ask me whether the future is brighter
than today, I would say yes; but the people must
be ready to pay for services and pay their taxes. A
simple example! At Obajana where we are
producing at a current capacity of 10 million
tonnes per year, which is $1.7 billion, we can
continue to produce cement for the next 100years
with the same capacity but you do not rest – mind
you, limestone is the cheapest mineral resource
in Nigeria, so if people look inward they would see
the opportunities for greatness”.
An Example From Lula of Brazil
“Look at the example of Lula Da Silva of Brazil,
the country used to be heavily indebted. “By the
time he left he cleared the debt. But the
policies he put in place for education and housing
engendered serious development. He said people
in government were bringing proposals which
were lies to him but he was resolute and he stood
his ground. “By the time he left office, he had
built 18 standard universities. Before he left
office, Brazil had $467 billion in reserves. “These
things can only be possible when people pay their
taxes.
“Nobody is perfect. “We need to come out and
pay our taxes. “Today I’m conscious about the
concerns of other shareholders.
“If where there were no shareholders, the people
in the office may allow me some leverage because
I am the boss and owner but when there are
shareholders, those who would have to process
the papers that would grant me undue privilege
but who are now shareholders would raise
questions because that act would not be in line
with best practices so the company is quarantined
from such indulgences and fraud. Once the
people know that you’re cheating, they too will
begin to cheat. Listed companies are more open
to transparency”.
The Negative Paradigm Shift
“There is a world of difference between our
parents and this generation. “Our parents were
more caring within the capacity they could
muster because they cared for the children, the
wife, their own parents, their farms and uncles
and even neighbours; but this generation is more
self-centred and cares only about themselves,
the ‘me’. If people really care about their
children they would work to make the future
better. “Without good infrastructure, the future
is bleak”.
Between Vision And Planning
“You must have a vision and not just a vision but
you must have a plan that would make you fulfill
that vision. For us at Dangote, for instance, just
conception and planning alone sometimes takes
two years. You must also put in place processes
of how to execute the plans. Our vision in the
next fives years is to be a company that has about
$75billion in market capitalization, be number one
in Africa and one of the first 100 in the world”.
The Scourge of Subsidy
On the issue of subsidy and the education that
Nigerians really need, Dangote became very
passionate. He said as Nigerians, there is need for
an understanding of the issues and a proper place
for government policies and the commitment of
Nigerians too.
At lunch with one African president, “he told me
how his country dealt with the issue of subsidy
and how people resisted. When they had subsidy
on diesel, some people changed their cars to cars
that ran on diesel; that when they removed
subsidy on diesel, the bills went down but
kerosene which still enjoyed subsidy had its bills
going up. He said it was not easy but he prayed
over it and went ahead to do it in a systematic
way such that funds which would have gone into
subsidy were dedicated for some specific
projects. Now that president even charges 10%
on PMS and diesel”.
When President Jonathan tried removing the
subsidy on petrol, Nigerians went wild in anger.
Dangote continues: “Would you believe that in
2011 and 2012, Nigeria paid $30 billion in subsidy,
money which would have been used to build at
least 20 refineries – that was the finding of a
report! How can we say that people are stealing
crude and we are running about, going to night
clubs and we are happy as a people?
“The total tax collected in Nigeria is just about
$10 billion. How much is that in a country as big
as Nigeria”.
In response to a question on the building of
refineries even in a regulated environment like
Nigeria, he said “may be we at Dangote now
would be referred to as being insane because we
are going ahead to build a refinery very soon in
Nigeria.”
To this, a question was immediately thrown at
him: “What are you going to do with it”?
“We would sell”, Dangote immediately responded.
“If you build the refinery alone you might not
make so much money but you’ll need to build a
petro-chemical plant because of the by-products.
“The investment is going to be about $8billion.
“Meanwhile the fuel they import for us is the
worst and we pay them for the best. “When we
have our refinery, we would sell to them here
and we can even cut the cost – no shipping, no
demurrage. “We cannot continue to behave the
way we are behaving now.
“Look, by 2020, Nigeria’s population is expected to
hit 200million. So, how would you handle cargo or
shipping of products for 200million people with
the existing facilities that we have today? How
would you distribute? The pipelines are not
functioning; the roads are not good. The ports
are not there. We should make up our minds on
what we want to do. Something drastic needs to
be done.
“What I think we should do is that we should
attain self-sufficiency instead of this 20:2020 thing.
“Government should encourage Nigerians as it is
doing to invest in Nigeria but some times we are
the architect of our problems. Part of the
problems we had about Benue Cement was that
the people said Obasanjo hated them that was
why he sold the other cement companies to
foreigners and sold BCC to a Nigerian. When you
go to deal with some officials the first thing they
ask for is technical partner and we tell them we
do not have because we have the technical know
how – this is what we do. “We’ve already
commissioned a company to help us build a
factory for the production of Urea and Ammonia
and it would not only provide employment but in
the area of fertilizer production it would serve
some purpose.

www.vanguardngr.com/2013/04/aliko-dangote-unscripted-the-gravest-danger-confronting-nigeria/