Revealed! Dangote explains why business struggles in Nigeria

• The Dangote Group president has attributed Nigeria's industrialization challenges to the nation's unstable power supply
• According to Dangote, it costs 30% less to run a firm abroad than it does in Nigeria and other African countries
• He said that because of its dependable power source, Ethiopia's cement factory is the most profitable in the business

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Alhaji Aliko Dangote, the president of the Dangote Group, has blamed Nigeria's industrialization difficulties on the country's erratic electrical supply.

Dangote said his Ethiopia's cement mill is the most profitable in the company due to its reliable power supply. Photo Credit: Dangote Cement
Source: UGC

Due to the steady supply of electricity in Western nations, Dangote said that operating a business overseas is 30% less expensive than doing so in Nigeria and other African nations.

The wealthiest man in Africa made this claim recently when he hosted Zambian Energy Minister Makozo Chikote at the Dangote refinery in Lekki, Lagos State.

According to him, Ethiopia's cement mill is the most profitable in the company due to its reliable power supply.

Dangote succeeds where his grandfather failed

He said he had done research before entering the industrialization process to find out why previous attempts at it, including his grandpa, had failed.

He revealed that a shortage of electricity is one of the difficulties.

He explained,

“If there’s no power, there won’t be growth. For example, anything I’m going to do abroad will cost me maybe 30 per cent cheaper than here, because abroad is plug-and-play. You just go, no infrastructure construction. You just build a factory, and you connect to the network; that’s all.“That’s why, if you look at it today, I tell you that our most profitable cement factory is in Ethiopia because there’s no investment in power. They gave us power at the same rate for five years. So, we plan, it’s a one-price electricity continuously.”

Dangote claimed that the business in Nigeria had to make significant investments in order to generate electricity for the refinery and other facilities, something that does not occur in industrialized countries.

In addition to electricity, Dangote attributed Nigeria's lack of industrialization to the government's inconsistent policies.

“One of the problems of industrialisation is inconsistencies in government policies, where, just like a footballer, you’re about to score the goal, and the government will remove the goalpost and point behind you that the goalpost is behind. So, you have to now turn. Once you turn back, you have a lot of challenges to get to that goalpost again,” he stated.

According to Dangote, explaining to the government that it is a significant shareholder in industrialization, particularly in terms of tax collection, is the greatest approach to lessen the contradictions.

Dangote said if a business shuts down, one of the major losers is the government. Photo credit: Dangote Group
Source: Getty Images

“For example, in our cement, every N1 we turn around, 52 kobo go to the government in various taxes—30 per cent corporate tax, 7.5 per value-added tax, two per cent for education, and one per cent for health. When money is being made in the company, if you want to take the money, all the shareholders will have to pay the government 10 per cent as withholding tax again. This is for the Federal Government. When you add the state and the local government, everything now is something else,” he stressed.

Dangote maintained that if a business shuts down, one of the major losers is the government, stressing that industrialisation is key to national development.

Dangote Shares Secret to Running a Successful Business in Africa

Legit.ng reported that the head of the Dangote Group, Aliko Dangote, has urged African business leaders to go beyond discussion and instead focus on decisive action and real results.

Speaking at the African Renaissance retreat in Rwanda, Dangote stated that although the continent faces many difficulties, its youthful population and plenty of resources present prospects for big and inclusive growth.

he said. “Additionally, we have 65% of the world’s arable land and 10% of the planet’s internal renewable freshwater sources,”

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Source: Legit.ng