Aliko Dangote, president and chief executive of Nigerias Dangote Group . His business acumen and rapid expansion in his own country and other world economies has made him fabulously rich. Picture: Lucas Jackson

Aliko Dangote made his fortune by gambling on Africa’s future and that gamble has paid off spectacularly, Simon Allison reports.

At the age of 57, Aliko Dangote is Africa’s richest man. Forbes estimates his net worth to be $20.8 billion (R224bn); the wealth of his nearest competitor, South Africa’s Johann Rupert, is valued at $7.9bn. Dangote is known as a softly spoken workaholic, with all the trappings of wealth, including the luxury yacht and the private plane.

But it is not the size of his fortune that matters. More important is how he made it – not through resource extraction or milking state coffers, but by gambling repeatedly on the future of both Nigeria and Africa. The risk has paid off, spectacularly, making Dangote a living embodiment of the “Africa rising” narrative, and his company one of the key drivers of Africa’s economic development.

It all started in 1977 when 21-year-old Dangote – fresh from a business degree from Egypt’s Al-Azhar University – begged his uncle for a 500 000 Nigerian naira loan (then worth about $325 000). Dangote’s family were wealthy Muslims from northern Nigeria.

His father Mohammed was a prosperous commodities trader, but the real money was made by his maternal grandfather, Alhaji Sanusi Dantata, whose groundnut empire made him the wealthiest man in west Africa. Dantata’s son, Abdulkadir, was the uncle who gave Dangote his first start in business – and, before his death in 2012, was also one of Nigeria’s richest men.

Dangote chose to strike out on his own, using the loan to start a general trading company, importing bulk commodities like sugar and rice. Business was good, but he soon discovered a gap in the market: why was Nigeria importing sugar when it could be producing its own? Why was the country bringing in expensive cement when it sits atop one of the world’s largest lime deposits?

The answers to these questions – conflict, corruption, incapacity and uncertainty – lie at the heart of Africa’s decades of stunted development. Dangote, however, was undeterred and resolved to move into manufacturing: first salt, then flour and sugar and then cement, which turned out to be the really big money-spinner.

Dangote’s philosophy is known as “backward integration”. This is when a company acquires its own raw materials or component suppliers. In Nigeria it means import substitution: it encourages Nigerians to make their own materials instead of using foreign supplies and equipment. This stimulates the economy through more employment and investment, keeping Nigerian money in Nigeria.

Thanks largely to Dangote’s success in the cement sector, backward integration has become official government policy, included as a central plank of President Goodluck Jonathan’s Nigeria Industrial Revolution Plan.

At the same time, Dangote is politically astute: he has carefully navigated his way through changing governments and regulations, emerging unscathed and, with bigger profits, every time. His political connections are crucial to the scale of his success, especially his relationship with former Nigerian president Olusegun Obasanjo.

Dangote funded Obasanjo’s 1999 and 2003 election campaigns and Obasanjo returned the favour by introducing restrictions on imported cement in 2001, among other items.

“Dangote is counted among Obasanjo’s inner circle of business advisers,” observed Brian Browne, former US consul-general in Lagos, in a 2007 diplomatic cable released by WikiLeaks in 2010. “It is no coincidence that many products on Nigeria’s import prohibition lists are items in which Dangote has major interests.”

In fact, the Dangote Group has substantial shares in just about every major sector of the Nigerian economy. It makes salt, sugar, rice, pasta, flour and fruit juices; it supplies steel, cement and packaging; it buys and sells property, and holds a 3G telecommunications licence; it manages ports; it operates a 5 000-truck-strong haulage fleet.

Last year, the Dangote Group claimed that its annual turnover was in excess of $3bn. It is Nigeria’s biggest company, and ambitious expansion plans mean it is only going to get bigger. “Dangote is going to go haywire now,” observed Lyal White, director of the Joburg-based Centre for Dynamic Markets, an economics think tank.

Another crucial factor in the Dangote Group’s success has been the steady growth of the Nigerian economy, which has expanded at an average of 7 percent every year for the last decade. This growth is often dismissed as a resource bubble, fuelled by Nigeria’s vast oil reserves. But driving these impressive figures are other factors: increased agricultural output, significant enlargement of the manufacturing sector (7.7 percent last year according to the World Bank) and booming retail and construction sectors. This growth has benefited Dangote’s businesses.

“Dangote is intimately entwined with the rise of Nigeria,” White said. “If Nigeria does well, so does he.” Given the size of the Dangote Group and the sheer breadth of its operations, the reverse is just as true: Nigeria needs Dangote to keep doing well, to keep creating jobs and to keep re-investing in the country.

In this, Dangote is something of an anomaly. In bestowing him with its Man of the Year Award in January last year, Nigeria’s Daily Independent noted that Dangote is “one Nigerian who makes his money in Nigeria and also spends it in Nigeria for the benefit of the country’s economy; unlike several other Nigerians who spend their wealth buying houses and other choice properties abroad, or stacking them into foreign banks to the detriment of the growth of their own country’s economy, Dangote is always at home with his business.”

Indeed, Dangote – who appears just as comfortable in a traditional kaftan as he is in a business suit – spends at least half his time in Nigeria. He divides the rest between London, where he is prepping to list Dangote Group on the London Stock Exchange, and other countries, mostly in Africa, but also abroad, where he is looking for or exploiting new opportunities.

Home is a mansion on Lagos’s Victoria Island, which he shares with the younger of his 15 children from four marriages. He is not married at the moment and still smarting from the public rejection of his advances by the daughter of the late president, Umaru Yar’Adua, according to press reports.

The list of new projects, for which Dangote plans to invest around $16bn, is enormous. Within Africa, five new cement plants will come online this year, in Gabon, Republic of Congo, South Africa, Tanzania and Zambia. In South Africa, the Dangote Group’s acquisition of 64 percent of local company, Sephaku Cement, is the largest single foreign direct investment in South Africa by an African company.


Outside of Africa, Dangote has plans to work in Myanmar and Iraq, and has obtained all-important limestone mining rights in Indonesia and Nepal.

In January, Devakumar Edwin, Dangote Cement chief executive, announced the company had signed a joint venture agreement with an undisclosed company to tackle the South American market.


So far, Dangote’s rapid expansion has been relatively smooth. Aware that he brings jobs and deep pockets with him, African governments in particular have welcomed his attention. Presidents clear time in their schedules to meet him. Dangote knows the importance of these interactions. “He understands the value of commercial diplomacy more than anyone I’ve ever seen,” White said.

Nonetheless, it has not all been plain sailing. In the Senegalese town of Pout, 40km west of Dakar, the shiny new Dangote Cement plant lies dormant as the group battles legal action from competitors who say the new plant was built in violation of safety standards and without a proper environmental impact assessment. This, the competitors allege, will allow Dangote to undercut the market. And during construction, a court found that the same plant encroached on a sacred forest owned by the descendants of a famous Sufi mystic. Construction could only continue once Dangote had appeased the family with a $12.6 million pay-off, it was reported in March.

Another barrier is the man himself. Dangote is a notorious micro-manager, involved in the smallest decisions. This quality, coupled with an exceptionally strong work ethic, has underpinned his fortune. As the company gets bigger, however, Dangote simply cannot maintain the same level of control. How he devolves responsibility, and whether he is able to properly corporatise the company, will determine its future, White said.

A third potential hurdle is Dangote’s close political connections, which he has repeatedly parlayed to his advantage. Dangote is very close to Nigeria’s ruling People’s Democratic Party (PDP), having funded the election campaigns of three presidents: Obasanjo, Yar’Adua and Jonathan. Going into next year’s elections, however, the PDP is facing an unprecedented threat from a new opposition coalition, the All Progressive Congress.

For Dangote, however, these are minor obstacles. He knows that with a proven track record in Nigeria, a huge cash surplus and almost no debt, his company is ideally positioned to become a global player. Dangote made his fortune by gambling on Nigeria’s success when others would not dare. The risk paid off, both for him and Nigeria. Now he is looking to make another wager, this time with even bigger stakes.

For it to stick, he needs Africa to keep developing. To keep expanding, it needs people like Dangote to keep sinking big money into the continent – and then re-investing the profits. So far, his approach looks less like a long shot and more like a sure bet.

* Simon Allison is a freelance writer on African affairs.

The Mercury