Davos: The African Opportunity

Aliko Dangote, President and Chief Executive of Nigeria's Dangote Group

I sat down with one of Africa’s most successful businessmen, Nigerian billionaire Aliko Dangote, at the bustling Belevedere hotel in Davos this afternoon to have a one-on-one chat about his business and Africa.  He was dressed in a dapper navy suit ready for business; while here he is also meeting his McKinsey consultants and Goldman Sachs bankers.

Dangote has made a fortune by providing cement to Nigeria  and other African countries that otherwise would likely have to pay to import much of the materials. In December he consolidated his previously public cement holdings with his private investments across 14 African countries into newly listed Dangote Cement. The new group has a market cap of around $17 billion, more than one fourth the entire capitalization of the Nigerian market, according to Dangote.

Now he’s gearing up to list his firm in London in September or October of this year . A man of grand ambitions, he tells me that he expects his firm to have a market cap of $60 billion within five years. That’s a pretty lofty goal, particularly given Nigeria’s financial meltdown not too long ago.

When asked about risks in Africa, Dangote who has has investments in countries like Sierra Leone and Congo acknowledged that he gets such questions all the time but doesn’t see any big concerns:  “Before there was the risk that governments might nationalize assets but now we have investment agreements in the country that says if it does get nationalized, they’ll have to pay us.

Dangote later added that few people at the conference know much about Africa and instead rely on  historical information or hearsay for its facts. “I am not saying it’s as good as elsewhere”, but investment dollars help. In Zambia for instance, it used to be that Zambians had to hold 51% of any business operating in the nation. Dangote who wanted to set up a plant there went to the government last year and told them he would invest $400 million but only if he got ownership. The government he claims apparently changed its rules.

While even Dangote is cautious about Africa’s abilities to compete with countries like China in some sectors, he thinks that there are plenty of areas like agriculture, fertilizers, gas and chip production where Africa can be competitive.

Indeed opportunities are greater in Africa than anywhere else, he continues, given the fact that they are often starting from zero. “There is no African country that doesn’t have a shortage of power, for instance,” he explains.

Dangote also had a clear message for the west: “Don’t give any more aid to Africa.” Instead partner with businesses there and invest. “You will make money and we’ll make money and it’s better for everyone.”