The most fortunate multimillionaire Lagos dreams of changing course. After earning billions in Nigeria, Aliko Dangote wants to bet on the West. Is it a wise investment?
Aliko Dangote fascinates, even beyond the borders of Nigeria and Africa. Not a week goes by without a Western media publishing an article about the richest man on the continent. Aliko Dangote is stingy with her public appearances. He often keeps them secret for as long as possible. This does not prevent it from being the object of all attention. Their rarity probably makes them more expensive in the media. As a good businessman, he has understood this for a long time. His enigmatic smile will take the place of viaticum to his investment projects.
The tycoon does not have much to do to attract attention: it can only detonate on a continent so often associated with poverty. Dangote’s portraits are softening more often than in their turn. The son of a trader in Kano, northern Nigeria, he would have become wealthy by borrowing money from an uncle in the 1980s. He would have used that nest egg, a few hundred dollars, to buy cement: a lucrative business in Nigeria, where there were few cement plants.
One of the first arguments put forward to explain Dangote’s fortune at just sixty is the fact that he would be particularly economical. The argument is a bit short: Hundreds of millions of people around the world can attest to the fact that they have adopted a particularly modest lifestyle all their lives and that they have not become multimillionaires. To demonstrate his incredible humility, Dangote boasts in particular to drive his own car in certain circumstances.
On the other hand, it should be noted that the lifestyle of Dangote has nothing to do with that of Father Pierre or Mother Teresa. He owns a beautiful yacht that wets in the lagoon in front of Victoria Island, the “Nigerian Manhattan”. The villas in which he lives do not breathe misery either. Dangote does not give the impression of having made a vow of poverty.
In Lagos, nobody would understand that he lives modestly. ” Champagne for a few or drinking water for all, ” Thomas Sankara used to say . The well-to-do Lagos have heard the message, and they came to a conclusion a little different from that of the Burkinabe revolutionary who preferred to ride in 4L rather than Mercedes. In Lagos, “bling-bling” has the force of law even among the relatives of the “modest” Dangote.
His character has always been surrounded by a veil of mystery. For a long time he remained very discreet, almost anonymous. He came out of the shadows only to announce one day that he was ” the richest black man in the world “. The American magazine Forbes published in 2007 a ranking announcing that the American Oprah Winfrey was the richest black person in the world. ” I’m much richer than that, ” replied Dangote.
One of the reasons for the fascination of Dangote: he did not make his fortune solely through speculation. As a businessman, he quickly became a producer of cement, but also pasta and flour, etc. Today, he is building a huge multi-billion dollar refinery in the Lagos area. It is expected that in two years’ time Nigeria will no longer be able to rely on imports of refined gasoline.
Long the largest oil producer in Africa before being overtaken by Angola, the country now depends on imports for its supply of gasoline. Its refineries are too bad to meet local demand. A terrible paradox for the continent’s largest economy. The Dangote project is expected to end what is perceived as national humiliation. But in Nigeria, its image is sometimes worse than the international one.
Close to former President Obasanjo
Many businessmen accuse him of having built his success on his close relations with the political world, especially with the generals. Dangote is close to General Olusegun Obasanjo who has ruled the country twice. First, at the head of Nigeria at the time of the military dictatorship from 1976 to 1979, this soldier returned to power in 1999, following his victory in the presidential election.
Re-elected in 2003, he remained there until 2007. Still today, Obasanjo remains very influential. The 80 year old general is still considered a “maker of kings”. He played a key role in the election of President Muhammadu Buhari in May 2014. To thank him for the many services rendered, Aliko Dangote notably financed the Obasanjo Presidential Library Project. On the American model, it is a large park and a museum to the glory of the former president, built in Abeokuta, the hometown of Obasanjo.
Many Nigerian businessmen accuse Dangote of taking advantage of his political backing to impose unfair competition on his competitors. ” He manages to organize monopolies for his benefit in the areas that interest him. He managed to ruin many rivals. In addition, he had one of his associates thrown into jail who did not want to sell his shares. As long as he did not sign the deed of sale of his shares in the company, he had to stay in his prison. That was the deal, “says a businessman, who readily admits being afraid of Aliko Dangote:” He is too powerful and does not hesitate to threaten those who get in his way . ”
The Dangote method has been very successful in Nigeria, but it is sometimes disappointing in the rest of the continent. ” Outside of his country of origin, he does not have the same political support. So, he really struggles to win, “said Aliou Ndiaye, a Senegalese business leader.
The Dangote model is closely linked to Nigeria. The current crisis in the most populous country in Africa does not do the business of the tycoon. With the fall of the naira, the Nigerian currency, his fortune has almost halved in the last four years, according to Forbes magazine . It was estimated at nearly $ 20 billion before the crisis that hit Nigeria in 2014. It then increased to $ 15.4 billion in 2016. Today, Forbes “allocates” the modest sum of 12 billion.
According to the 2017 ranking of the American magazine, Dangote remains the richest man on the continent. But in one year, he lost 54 places in the ranking of the world’s most fortunate men. He is now in 105th place when he was in 51st last year.
Round ball dream
Nothing suggests a rise of the naira in the short term. It has steadily won against the dollar, the euro and the pound sterling. In two years, it has lost half of its value against these two strong currencies.
Aliko Dangote, who has always been a great pragmatist, announces a change of strategy. Usually stingy with words, in August 2017 he granted a Bloomberg interview to make an announcement.
In the coming years, it will achieve ” 90% of its investments in the United States and Europe .” Football fan, he announced his desire to buy the English club Arsenal, very popular in Nigeria, including Lagos, and ” fired ” French coach Arsene Wenger who, according to him, ” has had its day ” .
Communicating end, Dangote knew that this kind of announced investments was going to make the “buzz”. Note however that this is not the first time that the tycoon of Lagos announces his desire to buy this prestigious football team.
In addition, the London club is absolutely not for sale. Moreover, to announce the dismissal of Wenger even before having taken possession of the club seems all the same a hazardous strategy. In general, capitalists expect to have taken control of a company to announce the dismissal of its top executives.
Fine strategist, Dangote acts a bit as if he did not believe it himself and as if it were a lure. He knows that investments in the West will be very complex: the accounts of his companies will then be examined very carefully. Dangote is not known for his propensity to delegate. In its group, senior managers often have very little room for maneuver. The turnover is important.
This highly centralized management has no doubt made its success in its infancy. Since his group has become a juggernaut, he begins to pose problems. Especially when it comes to opening up internationally. How to invest in the United States and Europe without delegating a minimum of power to senior executives?
In Nigeria, the situation becomes critical. The recession has been going on for a year. Politicians are also putting pressure on Aliko Dangote to invest in projects that are important to them. Originally from Kano, the commercial hub of the Muslim north, it is supposed, according to them, to show solidarity with this area.
As a northerner, President Buhari relies heavily on Dangote to carry out projects of a nature to develop his region of origin. Even if they are not always of great profitability. ” The generals know everything Dangote owes them and they do not hesitate to remind him of the occasion, ” said Ali Mussa, a businessman also from Kano.
” Dangote dreams of getting out of his Nigerian meadow, but can he afford it? That’s the whole question, “asks Ali Mussa. He adds with a smile: ” Even if it were to succeed, the mutation of the Dangote group would take years. Meanwhile, Arsene Wenger can calm down. For him it is probably not Lagos that comes the most immediate danger.