Aliko Dangote
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Nigeria’s Dangote shifts focus from cement to oil and gas

Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Africa’s richest man, Aliko Dangote, plans to launch Nigeria’s first private crude oil refinery by 2019 while almost doubling his cement production on the continent by adding plants in eight countries as he shrugs off a regional economic downturn.

Dangote told Reuters the $12 billion refinery would have a capacity of 650,000 barrels a day, cornering the market in Africa’s most populous country, where fuel shortages are a perennial problem.

Until recently, Nigeria was Africa’s biggest crude oil producer but it imports 80 percent of its fuel because poor maintenance means its four refineries never reach full output. Its current daily consumption is 260,000 barrels, according to the International Energy Agency.

A slump in commodity prices has hammered Nigeria’s economy – along with many others on the continent – and raised the cost of borrowing but Dangote, whose business empire stretches from cement to flour and pasta, is pushing hard into oil and gas.

“It will be ready in the first quarter of 2019,” the billionaire founder of Dangote Cement said of the refinery. “Mechanical completion will be end of 2018 but we will start producing in 2019.”

Dangote said the plant, which will include a $2 billion fertilizer unit, was being funded through “loans, export credit agencies and our own equity”.

Some $3.25 billion had come from local and foreign banks, while the central bank had also chipped in. The IFC, the private sector arm of the World Bank, has lent $150 million.

Dangote also has plans for a gas pipeline through West Africa. Nigeria has the world’s ninth largest proven gas reserves, at 187 trillion cubic feet (tcf), but loses half of it to flaring and re-injection.

Despite the new focus on oil and gas, the business magnate said he planned to build cement plants in Cameroon, Ethiopia, Kenya, Mali, Niger, Nigeria, Senegal and Zambia by 2018. Another plant will open in Congo Republic by September, he added.

A cement plant in Ivory Coast would triple output to 3 million tonnes, up from an initial target of 1 million, he said, while two new plants in Nigeria would add 6 million tonnes annually.

“As at now, what we have in operation is almost about 45 million tonnes, so we have just another 40 million tonnes to go,” he said, affirming an Africa-wide production target of 85 million tonnes a year by 2018.



The collapse in oil prices has hit Nigerian companies hard, with many unable to access dollars due to central bank foreign exchange restrictions imposed to prop up the naira.

The worst-affected have gone to the wall or shed large numbers of staff, but a study by Reuters of an 11-week period in March to May showed that Dangote firms managed to secure a healthy share of dollars at the cheap official rate. [nL4N19E3JX]

Dangote said the $161 million bought during that period from the central bank merely reflected the size of his business and did not represent preferential treatment.

“We have been badly affected like any other company,” he said, arguing that operational costs totalled $100 million each month due to recurring expenses such as the purchase of parts for cement production and running a fleet of 9,000 trucks.

“When you are talking about 20 billion dollars worth of projects, what is 161 million? One-hundred-and-sixty-one million dollars is my six weeks’ need,” he said.

Dangote’s sugar refinery in Nigeria had reduced capacity by 15 percent as a result of the dollar crisis. “We ended up owing a lot of dollars,” he said.

This week, the central bank removed the peg that has held the naira at the official rate of 197 for the last 16 months, leading to a 30 percent devaluation as the currency traded freely on the interbank market.

Dangote said the decline had pushed up costs. [nL8N19F31Y]

“This devaluation alone, we have lost over 50 billion naira ($176 million),” he said.

“The gas, which is our main source of power, is priced in dollars. If there is 40 percent devaluation, your price will go up by 40 percent. Every single aspect of the production will go up by that percentage,” he said.

Dangote also said he was eyeing a listing on the London stock exchange “within the next year or two”.

($1 = 284.1500 naira)


(By Alexis Akwagyiram. Editing by Ulf Laessing and Ed Cropley)

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Peugeot Nigeria: Rebirth and Revival thanks to Africa’s richest man?

Comments (0) Africa, Business, Featured

Aliko Dangote

January 26th saw the closing of bids for AMCON’s controlling shares of Peugeot Automobile of Nigeria Ltd.

AMCON’s acquisition of PAN’s controlling shares in October 2012 is set to end as Nigeria’s so called “bad bank” opens its shares of PAN up to bidders. Africa’s wealthiest man, Aliko Dangote, is ready to step up to the challenge.

January 2016 saw AMCON (the Asset Management Company of Nigeria), Nigeria’s so called “bad bank”, look to sell its stake in PAN (Peugeot Automobile of Nigeria Ltd.), and they began to invite bids from investors. AMCON currently owns a 79.3% controlling interest in PAN.

PAN was founded in 1972 as a joint venture between the French automaker and the Nigerian government, with the goal being to manufacture and market vehicles under the brand name of Peugeot.

Peugeot NigeriaDuring the 1980s PAN was profitable and produced upwards of 90,000 cars yearly. However, due to the influx of cheap, second-hand vehicles that began to come in to the country from Asia, the company began losing profits. This led to the sale of the controlling stake in the company, by the Nigerian government, to investors in 2006.

Unfortunately, the new investors did not fare well and managed to accumulate bad debt during their leadership, leading to AMCON’s acquisition of the majority share in the company in October 2012.

“Following the accumulation of huge non-performing loans (NPL) indebtedness to banks, in October 2012, the AMCON acquired the debts of the company and converted a portion to equity to help restructure the firm,” Peugeot had said.

Aliko Dangote and his associates take center stage

Enter Aliko Dangote, President and Chief Executive Officer of the Dangote group. A man that also carries the distinction of being Africa’s richest man, as ranked by Forbes in 2015, with an estimated wealth of $17.3 billion.

Dangote is already active in the cement, oil, food, sugar and farming industries, and now has his sights set on the automotive industry. Aliko Dangote has teamed up with the Nigerian States of Kaduna, and Kebbi, as well as the development lender Bank of Industry (BOI) to bid for the shares now up for sale by AMCON.

Governor Nasir El-Rufai told a conference, “We have submitted bids for the carmaker… with Aliko Dangote on board together with BOI, Kebbi and Kaduna State, we are confident our bid will sail through.”

Bidding for the stake controlled by AMCON closed on January 26th, and Governor El-Rufai did not provide any further details.

On its website PAN stated that its assembly plant, which is located in Kaduna state, has Peugeot Citroen PEUP.PA as its technical partner, and it has the capacity to assemble 240 cars in a day.

Made in Nigeria

Meanwhile, the Nigerian government has been keen on promoting a “Made in Nigeria” industrial policy and ordered local car distributors to make plans for new assembly plants back in 2014. They threatened to begin imposing prohibitive import duties.

Jean-Christophe Quemard, who is the executive vice president for Peugeot in Africa and the Middle-East, met with President Muhammadu Buhari in November to discuss reviving local production.

Other automakers such as Germany’s Volkswagen, Renault-Nissan, and South Korea’s Kia motors have also announced plans to begin assembling their vehicles in Nigeria, which is currently Africa’s biggest economy.

Not to be outdone, the Ford Motor Company of the United States will set up an assembly plant in Nigeria in November. With a 5,000 vehicle annual capacity, the plan is to produce up to 10 vehicles each day for the local market and eventually move into export into West African countries.

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Africa’s richest man Dangote bids for Peugeot Nigeria stake

Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Aliko Dangote, Africa’s richest man, has teamed up with two Nigerian states to bid for a majority stake in Peugeot Automobile Nigeria (PAN) Limited, a local joint venture with the French automaker, the governor of Kaduna State said on Thursday.

Governor Nasir El-rufai said the states of Kaduna and Kebbi along with development lender Bank of Industry (BoI) and Dangote have submitted bids for the stake which AMCON, Nigeria’s state-backed “bad bank”, is looking to sell.


(Reporting by Oludare Mayowa; writing by Chijioke Ohuocha; editing by Jason Neely)

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Growth in African wealth brings more philanthropy

Comments (0) Africa, Featured, Leaders

Mo Ibhrahim Foundation

As the number of millionaires and billionaires on the continent grow, many give back to programs promoting health, education and entrepreneurship.

As the wealth of the continent increases, African philanthropy is on the rise.

For example, Aliko Dangote of Nigeria, the richest person in Africa recently joined with the Bill and Melinda Gates Foundation to pledge $100 million to fight malnutrition in Nigeria.

Dangote has supported programs in education, youth empowerment and health as well as a program that offers micro grants to rural women and young people to help them start businesses.

Now he will help in the battle against malnutrition in his home country, where one in five children are malnourished and one in three suffers from stunted growth – the highest number in Africa.

With a fortune of $17 billion built in cement and sugar manufacturing, Dangote is considered the richest person in Africa.

Philanthropy increasing across Africa

Dangote is not alone in using some of his considerable wealth to help others.

A recent report by UBS and Trust Africa said philanthropy on the continent is on the increase, building on longstanding African traditions of giving back to family and community.

“Over the past ten to fifteen years, there has been phenomenal growth in philanthropic institutions across Africa,” according to the study, “Africa’s Wealthy Give Back” (pdf). “We have begun to see the emergence of more strategic philanthropy,” along with more formal infrastructure for giving, the report said.

The USB-Trust Africa study cited projections by McKinsey Global Institute that gross domestic product in sub-Saharan Africa will grow to $2.6 trillion by 2020. With that will come corresponding increases in the number of wealthy individuals.

Dangote with Bill Clinton

Dangote with Bill Clinton

Growing wealth fuels giving

It said there were nearly 150,000 wealthy people in African in 2013, and the number had increased 3.7 percent over the previous year. At the same time, the total wealth of this group increased by 7.3% to $1.3 trillion.

There are about 25 major foundations on the continent.

Patrice Motsepe, a South African mining tycoon, in 2010 was the first African to sign the Giving Pledge that was started by Bill Gates and Warren Buffet. In 2013, Motsepe donated half his fortune to his own foundation to help those in need. His net worth is estimated at $1.4 billion.

Sudanese billionaire Mohamed Ibrahim’s foundation produces an index of African governance and Ibrahim is known for fighting government corruption on the continent. His Mo Ibrahim foundation also offers scholarship aid to young African leaders. A pioneer of telecoms in Africa with Celtel International, his fortune is estimated at $1.1 billion.

Tony Elumelu, a Nigerian banker, whose foundation is funding 10,000 African startups at a cost of $100 million. The program provides entrepreneurs with $10,000 each, half for training and half to start the business. Elumelu’s goal is to create one million jobs and add up to $10 billion to Africa’s gross domestic product. Elumelu’s net worth is estimated at $700 million

Jim Ovia, the founder of Zenith Bank, one of the largest banks in Nigeria, and of the telecom Visafone, which has three million subscribers, supports technology startups. His wealth is estimated at $550 million.

With a fortune estimated at $450 million, Cyril Ramaphosa, vice president of South Africa, supports South African entrepreneurs through his Shanduka Foundation. His Adopt-a-School Foundation has already built 454 schools.

Philanthropy builds on African tradition

Halima Mahomed, a philanthropy advisor to Trust Africa, said the wealthy Africans are following deeply ingrained traditions of African culture. “Rich or poor, everyone gives in Africa” and the newly wealthy are following that trend, Mahomed said.

Gregorie Muhr, a philanthropy analyst at UBS, said the approach is changing, as the new philanthropists take a more business-like approach to their giving, having seen that millions of dollars previously donated in Africa have not always reached the intended objectives.

The advent of billionaire philanthropists is not unique to Africa. “The trend is global’’ in developing markets where a new class of super rich emerges, according to Jenny Hodgson, executive director of the Global Fund for Community Foundations.

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Nigeria’s Dangote Cement gains after plans to expand operations

Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria’s Dangote Cement share rose sharply on Monday after the firm, majority owned by billionaire Aliko Dangote, announced plans to expand.

Dangote Cement shares rose 7.8 percent on the local bourse after it said it plans to build new cement plants in Nigeria and increase local production capacity to 38.25 metric tonnes per year from 29.25 metric tonnes.

The new plants will help it cut the cost of production and lower product prices in the market, it said.

The local bourse rebounded on Monday, ending three consecutive days of decline.

The stock index, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, gained 2.02 percent to 23,977 points.

Dangote Cement, which accounts for a third of the market’s capitalisation, traded at 134.98 naira ($0.6783) at the close.

Other gainers include Unilever, which was up 4.94 percent and PZ Cussons, which rose 4.78 percent.


($1 = 199.0000 naira)


(Reporting by Oludare Mayowa, editing by Louise Heavens)

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Nigerian Billionaire Aliko Dangote Takes On a New Industry: Tomatoes

Comments (0) Africa, Business, Featured

nigeria tomatoes

Africa’s richest man Aliko Dangote has built a giant tomato processing factory which aims to boost Nigeria’s tomato production, domestic output, and jobs.

Nigeria grows around 1.5 million metric tons of tomatoes each year, making it Africa’s second largest producer and the world’s 13th. And yet Nigeria is not on the list of official exporting countries of tomatoes or tomato products. In fact, to meet local demand of more than 2 million metric tons of tomatoes, the country imports large quantities of both fresh and processed tomatoes, mostly from China. It is the world’s largest importer of tomato paste, seeing over 300,000 metric tons ($360 million) of tomato paste imported annually.

It’s a situation comparable to Nigeria’s oil industry. While it is the largest oil producer in Africa, gasoline shortages are a regular occurrence as a lack of infrastructure, poor maintenance, and mismanagement have left refineries working below capacity and forced a reliance on imports. Oil makes up just 14% of GDP, while 38% of the country’s imports are petroleum products.

In explanation of the tomato statistics, the Central Bank of Nigeria reports that the approximately 200,000 Nigerian farmers growing tomatoes lose about half of their harvest each year, due to poor food supply chain management and inadequate infrastructure of water, storage, and power supply facilities. The remaining half of the harvest is then subject to price depression, caused by the perishable nature of crops, pests and disease, high rains at peak season, poor marketing, multiple levies by state and local government agents, corrupt practices by officials at air and sea ports, and the costs of processing, packaging, and storage machinery and equipment. Farmers are unable to consistently make a profit, and as a result, many have stopped cultivation.

Dangote Tomato Processing Factory

Aliko Dangote

Aliko Dangote

But Africa’s richest man, Aliko Dangote, is looking to change the future of Nigerian tomatoes. Aiming to create jobs and boost Nigeria’s tomato production and domestic output, he has spent the last five years building a $20 million tomato processing plant outside the country’s second largest city, Kano (a city which has been blighted by poverty and unemployment, and the Islamist group, Boko Haram).

Set to open next month, the Dangote Tomato Processing factory will be Africa’s largest: the size of 10 football pitches set within 17,000 hectares of irrigated fields. It is expected to produce 430,000 tons of tomato paste per year. And it will directly employ 120 people, buying tomatoes from 50,000 farmers. The factory will employ modern farming techniques and improved seed varieties and chemicals (funded by the Central Bank of Nigeria) which are expected to increase yields and encourage farmers back into growing tomatoes.

The factory’s general manager, Abdulkarim Kaita, said: “Nigeria is such a huge market for tomato paste that we will find quite challenging to satisfy. Already local tomato paste packaging companies have placed orders with us which we will have to work hard to satisfy. We are set to begin operations. We are only waiting for the tomatoes which are ripening in the fields.”

Aliko Dangote

Aliko Dangote is the founder of the Dangote Group, one of Africa’s leading conglomerates. He comes from Kano, now home to his tomato factory, where, in 1977, he started the Dangote Group as a small food-trading company. Helped with a $3,000 loan from an uncle, he went on to transform this small business into an import and trading company with interests in flour, sugar, and salt. And almost four decades later, the Group is active in 15 African countries, and has expanded to cement, steel, real estate, telecommunications, haulage, port operations, polypropylene packaging, and oil and gas.

Dangote Cement is Africa’s largest cement producer, and counts plants in Cameroon, Ethiopia, Zambia, and Tanzania, producing more than 30 million metric tons annually. And, dominating the sugar market in Nigeria, the Dangote Group sugar refinery in Lagos is the second-largest in the world.

Despite a weak Nigerian currency and domestic difficulties which saw his net worth plunge $5 billion over the past year, Dangote is still Africa’s richest man. With an estimated net worth of $14.3 billion dollars (Jan 2016), Forbes ranks him as the 67th richest person in the world.

The Dangote Group

But while undoubtedly Dangote has seen huge success in Nigeria, there are also concerns that his actions are not entirely positive for the country.

Dangote Cement Factory

Dangote Cement Factory

For example, thanks to Nigeria’s characteristic power cuts, the Kano factory is to rely on diesel generators for electricity, something which will significantly add to production costs and therefore reduce the factory’s ability to compete with imported products. This status quo has so far led to the closing of numerous factories in the state of Kano, including two of Dangote’s own factories. As a solution, the Nigerian government plans to put restrictions on tomato imports in place this year, giving Dangote a forced competitive edge. The vice-president of Nigeria’s manufacturers union, Ali Madugu, comments: “Once the government can place restrictions on the import of Chinese tomato pastes… the sky’s the limit for the Dangote tomato paste because the market is there for them to exploit”.

Some fear that this policy of government assistance – whether higher tariffs, restrictions on imported products or outright bans – is creating damaging monopolies in Nigeria, which push up the local prices that everyday Nigerians must pay. For example, Dangote Cement makes a profit margin of 60% per bag of cement in Nigeria, but a margin of between 6% and 13% across the rest of Africa. Nigerians pay, as a general rule, twice or three times more than any other African country for cement. Restrictions on imported paste (which could be sold at prices that undercut the Dangote Group) could have the same effect, placing Dangote Tomato Processing in a position of monopoly, able to control pricing, production, and jobs.

Again aligning his own interests with those of the nation, as his businesses often seem to have done, Dangote has also announced a move into Nigeria’s precarious oil industry. The 650,000 barrel-per-day Dangote Petroleum Refinery and Petrochemical Company, located in the Lekki Free Trade Zone in Lagos, is scheduled for completion by early 2018. Promising to reform the Nigerian oil industry, increase productivity, and create more jobs, the facility will produce gasoline, diesel, aviation fuel / household kerosene, polypropylene, and fertilizer, and will be the fifth-biggest in the world.

Senior General Manager, Madhav Kelkar, said Dangote’s plant would not just supply the domestic market, but could lead to a self-sufficient Nigeria that could export to other parts of the world. And perhaps this is so. But for now, only the longer-term local price of tomato paste will reveal whether this tomato processing factory has been a positive development for the people of Nigeria.

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Africa’s richest man resigns from Dangote Flour as Tiger Brands cuts funding

Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Africa’s richest man Aliko Dangote and three other directors resigned from the board of Dangote Flour Mills on Monday as majority owner Tiger Brands cut funding support to its struggling Nigerian division.

South Africa’s Tiger Brands said it was “currently exploring various alternatives with regard to its investment in Dangote Flour Mills, which also announced a change of name to Tiger Branded Consumer Goods Plc.

Aliko Dangote holds 10 percent of the company’s equity in through Dangote Industries. The other directors who resigned are Olakunle Alake, Asue Ighodalo and Arnold Ekpe.


(Reporting by Chijioke Ohuocha, Reuters)

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From the Bottom(ish) Up: Aliko Dangote, Africa’s Richest Man

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Aliko Dangote is Africa’s richest man. Valued at $17.4billion, this Nigerian magnate is the 67th richest billionaire in the world, one of an elite circle of fabulously wealthy individuals who have made their fortunes in the poorest region of the world. Thirty years ago, Dangote received a loan from his uncle, which he used to break into commodity trading. In the intervening decades, 54-year-old Dangote has managed to build a multinational trading empire.


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