Business

Reasons Dangote’s Textile Investment Collapse: Selling Bank for N1.2 Billion and Factory Closures

Published by Tope Fakinlede on August 29th, 2024.

Reasons Dangote’s Textile Investment Collapse: Selling Bank for N1.2 Billion and Factory Closures

Nigerian billionaire Aliko Dangote has revealed that his foray into the textile industry led to significant financial losses, compelling him to sell Liberty Merchant Bank for N1.2 billion.

In a keynote address at the 2024 Manufacturers Association of Nigeria (MAN) summit in Abuja, Dangote recounted his struggles with the textile sector. He explained that his company invested billions of naira into the industry, which ultimately led to the closure of two of his textile plants due to lack of government protection and support.

Dangote shared that his company’s investment in the textile sector was substantial, including the acquisition of Nigeria Textile Mill, originally established by Chief Obafemi Awolowo. However, despite the booming textile industry in the 1960s, Dangote’s ventures faced insurmountable challenges, and the lack of supportive government policies forced him to shut down the factories.

He disclosed that to cover the pensions and gratuities of long-serving employees, he had to sell Liberty Merchant Bank for N1.2 billion. He said, “After selling the bank for N1.2 billion, nearly N985 million was used to settle pensions and gratuities. This was how we exited the textile business.”

Dangote noted that despite encouragement from former President Olusegun Obasanjo to reinvest in textiles, he chose to avoid the sector due to his past experiences.