Dangote Links Nigeria’s Industrialization Challenges to Unreliable Power Supply
Alhaji Aliko Dangote, President of Dangote Group, has pointed out that Nigeria’s struggle with industrialization is primarily due to the country’s unstable electricity supply.
According to Dangote, operating a business in Nigeria or other African nations is about 30% more expensive than in developed countries, where a reliable power supply reduces operational costs significantly.
Dangote made this statement during a visit by the Zambian Minister of Energy, Makozo Chikote, to the Dangote Refinery in Lekki, Lagos State. He noted that the group’s most profitable cement plant is located in Ethiopia, largely because of the consistent power supply there.
Before venturing into industrialization, Dangote mentioned he had conducted thorough research to understand why previous attempts, including those by his grandfather, had failed. He found that unreliable electricity was a significant obstacle.
He explained, “Without power, there can be no growth. For instance, operating abroad costs roughly 30% less than in Nigeria, simply because other countries have stable electricity. In developed nations, you just build a factory and connect to the grid—everything is ready for you.”
In contrast, Dangote said that in Nigeria, his group had to make substantial investments in power generation for its refinery and other facilities, a situation not encountered in developed countries.
Apart from the power issues, Dangote also criticized the inconsistency of government policies as another major barrier to industrialization in Nigeria. He likened it to a football game where just as you’re about to score, the goalposts are moved. “It’s frustrating to face these changes, as they create new challenges in reaching your goals,” he said.
To address this, Dangote suggested that the government be reminded that industrialization benefits them as well, especially through tax revenue. For example, he explained that for every N1 earned in the cement business, 52 kobo goes to the government in various taxes, including corporate tax, VAT, and additional contributions for education and health. He highlighted that industrial operations contribute significantly to government revenues, and if businesses shut down, the government also suffers.
Dangote emphasized that industrialization is crucial for Nigeria’s long-term development, stressing that the government stands to gain considerably from a thriving industrial sector.
