Me, Obasanjo and Nigeria
By MIKE AWOYINFA and DIMGBA IGWE
Saturday, July 07, 2007
•Alhaji Aliko Dangote
Photo By: Sun Publishing
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PROLOGUE: AMERICANS talk and proudly celebrate an ideal called the American dream. But this is a Nigerian success story come true—the Nigerian dream. The dream of Alhaji Aliko Dangote, the entrepreneur par excellence, the trader turned manufacturer, probably Africa’s richest man with billions of dollars in his kitty and with mega businesses: cement manufacturing, sugar refining, flour, food, drinks and of late, the controversial purchase of two Nigerian refineries.
Dangote, the man on the go to become a global business player with eye particularly on India and cornering of the sugar market in sub-Sahara Africa. Dangote, who is humble but confident enough to admit that he is by far richer than Oprah Winfrey, rated by Forbes as the richest black woman on earth.
Since our last interview in which we listed Dangote’s 10-point business tips, we have been inundated with requests for a continuation of the Dangote corporate secrets by those who said the first story left a great impact in their lives. It became inevitable that we have to return to the Dangote series.
On this Lagos Monday midday traffic gridlock, visible down below from the top floor of his massive office decorated with on-sight pictures of his factories, Dangote is on the verge of leaving Lagos for Ogun State where he is to sign a contract for two spanking new cement companies in Sagamu and Igbese, which would cost $2.4billion.
We couldn’t have come at a much better time for an interview with the man most Nigerians are eager to hear from, the man in the eye of the storm for the sale of two Nigerian refineries many believed were sold far too cheaply because of his strong links with the powers-that-be.
Dressed in ‘buba and sokoto’ with a black Yoruba cap to match, Dangote, is the Nigerian paradox: a rich man who looks like an average man, if not a poor man. An extraordinary man who looks like an ordinary man. In a country where riches go with loudness, pride and arrogance, Dangote is a quiet and humble man who would breeze through an airport without causing a stir. We had earlier met at the Murtala Muhammed Airport on our way to Abuja. He was kind enough to buy us a bottle of water and later agreed to this interview. In the plane, he did normal things like everybody else: eating and drinking the simple and not-so-tasty snacks offered. The only sign of affluence was that he chose to stay in the Business Class, which separated him from the “multitude” in the Economy Class.
Dangote is like a book you cannot judge by its cover. And he is a book himself, a bestseller waiting to be written. You are reading here the memoir before the memoir. It is Dangote’s frankest interview ever. And we serve it to you straight from the horse’s mouth, storified for your reading pleasure:
“The price Nigerians are paying for fuel and diesel is high because they are paying the price of inefficiency and corruption within NNPC,” Dangote says.
“They (NNPC) are not efficient. If they are efficient, then they should produce like India. We are paying for the inefficiency and corruption. There is corruption in the industry. It is a known thing.”
The Dangote story, which starts today, is part of the new focus of The Sun, the Voice of the Nation, a newspaper group that is moving to a higher plane as the centre of national discourse on business, political and social issues.
And, if there is one person whose meteoric forays into the commanding heights of the nation’s business and at times, political sectors, are stirring a national controversy, it is the shrewd corporate mogul, Aliko Dangote.
To some, he is the voice of business, the leader of the business community and the epitome of the Nigerian Dream. But to others and especially his ardent army of rivals and critics, he is profiting from an unconscionable political cronyism and simply buying up the nation’s economic legacies at give-away prices.
His case is made worse by the fact that he is an unapologetic friend of one of Nigeria’s most disliked political leaders, former President Olusegun Obasanjo. In this interview, Dangote opened up not only on the secrets of his dizzying multi-billion dollar business successes, he also gave insight into what binds him to the former President Olusegun Obasanjo.
Being No.1
My story is the story of a man and a brand Nigerians have come to know, to love and to accept. Nigerians are investing in us because they believe in us, they believe in the name Dangote. Apart from believing in us, we have a track record which we have actually shown. If you look at all our factories, they have grown steady and gradually to where we are today. In all modesty, we can say we have done very well. There is no business that we are in and we are not No.1. The worse one that we have, maybe we have a second position.
That in itself is our business strategy. We aim to dominate our market, to lead in every market segment. They have all been run efficiently and professionally by people who really know the business very well. We have a very good brand name and that is part of what many people are actually investing in. They are not really investing in Aliko Dangote only. They are investing in the Dangote brand. They believe in my own business acumen but it is not the only thing that people are investing in. They are investing in the Dangote brand. Right from the beginning of our business, we have always been very conscious about what we give to the consumers. Because once you start on a wrong footing, that’s it. You’ve missed it. It’s almost impossible to go back and convince people.
It hasn’t been easy attaining No.1. We haven’t always started as No.1. Often, we start as a challenger, taking on a dominant player. Take the case where in year 2000 we started to enter a market where some people have been there 40 years before us. And we still went into the market and we fought our way in to become No.2. And we are on the verge of getting to No.1. The product is flour. We fought our way up into that market using the power of the Dangote brand and offering quality. Quality customer service and also the capacity. Because if you don’t have capacity, even when your market is good, you can’t do much. To meet capacity, we invested heavily. Apart from investing heavily, we made sure that our quality is good and consistent with the former quality when we used to import flour.
We used to be basically just importers. We were just importing and then we would market the goods and sell. In the beginning, we sold cement. Today, we manufacture cement. Today the best cement in Nigeria—you can go and take the samples and check—is coming from our one billion dollar factory at Obajana. And what we have there is 97 percent local raw materials. The only thing we lack is the gypsum. Even this, we buy some of it from Gombe area which we mix with the foreign ones. But everything is there in one location. And it is the best cement compared to the one we are importing from Taiwan, Europe and China.
The real cost in cement is the mining and the power. Power is a major cost. That is why the profit of a plant up North and the one down here is not the same. Because you need a lot of power up North in places like Ashaka. Ashaka and our own in Obajana is not the same cost. Even by economies of scale, when you look at staff strength of Ashaka, the staff strength of Ashaka is about two-and-half to three times more than the one we have in Obajana. Even though they produce 750,000 tons and we produce 5million tons. So you can see the big difference there. Because we have a very highly automated and most modern factory anywhere. If you look at our chimney, you would not see anything. No smoke belching out and polluting the environment. Nothing. You can eat under the machine. That is how environmentally friendly we practise. You don’t even hear the noise. You would think that the factory is off, but we are producing. You only see the cement out.
There is nothing extraordinary or mysterious about me. It’s just that we are very, very shrewd business-oriented company. Even though I am the CEO, it’s a collective business. I am not the only one that really runs the company. There are other good brains, there are other good brains. Because if I don’t have the good support, I can be the most entrepreneurial and talented person but I won’t be able to get to where we are today. Going forward, we have achieved so much and I believe in the next three years, by the time most of the projects stand on ground, we would be the biggest company in Africa.
Government and I
There is no one in the world who would have investments and be fighting government. It doesn’t matter where you are, whether you are in Russia, whether you are in UK, whether you are in America. You would not have investments and say, fine, my No.1 enemy is government. Do people who accuse me of being close to the government of Obasanjo expect me to say my No.1 enemy is government? It is not possible. There is no business that has no link with politics. None. And I challenge anybody to contradict me. Because you either say to a government in power, “ok, fine I am for you.” Or “I am against you.” And obviously, a right thinking business person would say, I am for you. If you need both the government and the people of the country, that is what you would do. That is where the issue of corporate governance and social responsibility comes in. You are not going to fold your arms, because you are operating within the environment. If you are operating within the environment, why do you want to make the government your enemy?
As an entrepreneur, you have to always try to advise the government. You have to tell them that yes, this is right, this is wrong.
In the modern world, the government does not really run the economy. It is the private sector that runs the economy. But there must be a good partnership between the government and the private sector. If the private sector and the government are at variance, then the economy would not move forward. But they need this cordial relationship to be able to move the economy forward. And that’s just where we are as a bridge. If I have this business and I now take a ministerial appointment, then it is totally a different ball game. It is not a question of boasting, our business is real. Real in the sense that yes, we have cement business for example.
The cement business that we have, every single government that comes in, we would be friendly with them, because we are government-friendly. That is No.1. And I believe each and every company is government-friendly. Let Jim Ovia go and be the enemy of government and you would see where Zenith Bank would go. Or UBA. Or First Bank. Even as conservative as First Bank, let them say they don’t have anything to do with government and that they are on their own. Let them be coming out to say things against the government. And they would reap the consequence.
Obasanjo and I
Former President Obasanjo and I became closer because his government is purely for people who would add value to the economy. If I wasn’t adding value to the economy, I can assure you that I wouldn’t be as friendly as I am with Obasanjo. Eighty-five percent of my relationship with Obasanjo has to do with the economy of the country. Even when we sit down, eight-five percent of the time is spent discussing the economy. How do we move the economy forward? And I think I have to be really grateful. Let me share my experience on cement, for example. But for Obasanjo’s encouragement and push, there is no way Obajana would have been possible at all. It was his push that made the difference. I would have made more money importing cement, because I know my cost, I would pass my cost on to the consumers. And today, freight rates from Asia are so high that it is unbelievable. People would have been paying more than N2,000 per bag for cement, if we were importing.
Right now, I am at the point of going to have a meeting with the governor of Ogun State, because we are going to do twice what we have done in Obajana in Ogun State, in Sagamu and Igbese. We are actually going to sign the contract this month, and the contractor would move to the sites and mobilise the sites within a period of 90 days. We have had this project for a while, but now we are doing even four times what we intended to do before.
Still on Obasanjo, let me tell you something. We have never, ever done business with anybody in the government. I don’t like to boast, but let me tell you something. I was born into money. Both my fathers—from my mother’s side and also from my father’s side—they have always had money. So, it’s not that I just came and picked up something from this thing. But it does not mean also in the family that everybody would be rich. I don’t know any of my family member—both from my mother’s side and my father’s side—that has ever had a deal with anybody in the government. It is not only Obasanjo. Even in the society, we don’t have partners.
For the new cement projects in Ogun State, we are targeting 10 million tons there. Now the cost of everything has gone up, even abroad. Cost of construction has gone up, equipment has gone up by 40 percent, but we think wit
