Entrepreneurship: the Secret of Dangote Group

Entrepreneurship: the Secret of Dangote Group

Friday, January 29, 2016, the 38^th ABU convocation lecture was delivered by Africa’s famous and illustrious son, Alhaji Aliko Dangote, GCON at the Mamman Kontagora Square, Ahmadu Bello University, Zaria. Another illustrious, celebrated Emir of Kano, Alhaji Muhammadu Sanusi II, CON, chaired the occasion. The event was simply a gathering of elites, industrialists, technocrats, academia and teeming youths. The venue was filled to full capacity with a wide array thousands seats – capacity was fully jam-packed with audience from across and outside the nation. The title of the lecture was “The Role Entrepreneurship in National Development: The Story of Dangote Group”. Two important things about this lecture are the message and the messenger. While the message was not only educative, thought provoking and inspiring but also a hope creation to the teeming unemployed youth who are continuously finding white colour jobs very scarce and inaccessible. The messenger was Alhaji Aliko Dangote, the richest African and himself, the product of most successful entrepreneurship in the recent history of mankind in Africa. The man who made these three things happened was the indefatigable Vice Chancellor of ABU Zaria, Professor Ibrahim Garba. The achievement is largely attributable to the innovative leadership style of Prof. Garba and pubic goodwill, which he created over the years. He eventually succeeded in making Dangote to spend more than 48 hours, a time that was highly charitable to the university community as Dangote donated ten blocks of hostel accommodation for thousands of students.  It was exceedingly unprecedented gesture by a single individual in the entire history of Ahmadu Bello University.

After listening to the lecture and analyzing the message, it was clear that “entrepreneurship” is the word behind the successful formation and market conquering of Dangote Group. Two years, after the lecture, the message is still apt, relevant and inspirational to creating more Dangotes among our restive youths. Africa and indeed, Nigeria is in dire need of additional Dangotes to take the continent out of the woods and usher in economic prosperity.  

The name “Dangote” rings a bell in virtually every household in Nigeria and millions of other households in the rest of Africa. In Nigeria, no household can escape daily use of series of household essential commodities from Dangote group: salt, sugar, rice, fruit drinks, vegetable oil, seasoning and pasta and other products such as cement, flour, etc among others. Thus, Dangote touches lives of several million people in Africa and beyond through direct employment, job and wealth creation, businesses and philanthropic activities. Dangote group is visibly present in seventeen other African countries apart from Nigeria. The group was able to commission four cement plants in Ethiopia, Zambia, Cameroon and Tanzania within a span of five months (June to October, 2015). This was unprecedented accomplishment by a single organization in Africa. In fact, Dangote Group is known to be one of Africa’s most diversified business conglomerates with a hard–earned reputation for excellent business practices and products’ quality. Dangote Cement, perhaps the largest in the group, produces 44 million metric tons of cements annually and plans to increase its output by 33% by 2020. The Dangote group is today the most successful business conglomerate with investments in food and beverages, petrochemicals, oil and gas, cement, real estate and transportation and logistics. The group is a multi billion Dollar business empire in Africa. Who is behind the successes of Dangote group? Alhaji Aliko Dangote, CGON.

Aliko Dangote is the President and Chief Executive of Dangote Group, which he founded over three decades ago as a simple enterprise and nurtured to its current status, an international business conglomerate with interests in diversified manufactured commodities distributed across the continent. According to Forbes 2017 ranking, Aliko Dangote remained Africa’s richest person for the sixth year running with a $12.1 billion fortune, despite about $5 billion drop in his net worth for the second year in a row. By the 2018 ranking, Dangote’s fortune of $14.1 billion placed him as the 100^th billionaire in the World alongside Harold Hamm of the United States of America. Dangote remains the richest African of the year for the seventh time by 2018. The first and second 2018 World Billionaires are both Americans; Jeff Bezos and Bill Gates with $112 and $90 billions, respectively. What is the driving force behind Dangote’s unfolding successes over the years? Entrepreneurship is the answer to this intricate question.

Alhaji Aliko Dangote is a student, master and believer of entrepreneurship. The word becomes his guiding principle for his daily chores, his weekly plan of actions, his monthly tactical activities and yearly strategic plan as he elevates his business from one milestone to another. His business acumen and doggedness to choose his next business step is solely dictated by entrepreneurship spirit. He knows several schools of thought on entrepreneurship but seems to be devoted to the six listed by Cunningham, which he presented during his lecture;

1.     Great Person School states that the entrepreneur has intuitive ability – sixth sense – and traits and instincts he/she is born with. Without the trait, the individual is like every other mortal.

2.    Psychological characteristics school- the entrepreneur has unique abilities, attitudes and needs, which drives him/her. Entrepreneur cannot be developed or trained in classroom situation

3.    Management school; entrepreneurs are organizers of an economic venture; they are people who organize, own, manage and assume risk

4.    Classical school; the central characteristics of entrepreneurial behavior is innovation.

5.    Leadership school; entrepreneurs are leaders of people, they have the ability to adapt their style to the needs of the people

6.    Intrapreneurship school; Entrepreneurial skills can be useful in complex organizations; intrapreneurship is the development of independent units to create, market and expand services.

The common traits for all successful entrepreneurs as stated by the lecturer were ability to plan, acquisition of communication skills, marketing skills, interpersonal skills, management and leadership skills.

A combination of these schools of thought result in a high breed entrepreneurial personality with intuitive ability, innovative mind, management shrewdness and organizing ability. That is the man – Aliko Dangote.

Aliko Dangote started his business in 1978 with a seed capital and a soft loan from his grandfather, the famous Alhaji Sanusi Dantata of blessed memory. He went into commodity trading and incorporated two companies in 1981, three years into business. The business was diversified over time into a conglomerate trading in cement, sugar, flour, salt and fish. By early 1990s, the conglomerate became the largest trading outfit in the country focusing on importation and distribution of sugar, rice, vegetable oil, steel rods, pasta, cement and agro-based commodities. At the time, the business was booming and providing hundreds of direct jobs to Nigerians who worked in sales outlets across the nation. There were equally hundreds of indirect jobs to drivers, distributors, retailers, and several others along the chain. Although, the business was exponentially expanding continuously, patriotism and entrepreneurial acumen made Dangote to realize that “Importation stimulates economic growth in exporting countries while transferring inflation and job losses to importing countries”. This realization and Dangote’s trip to Brazil in 1997 marked a turning point for Dangote group, for Nigeria and indeed Africa.

Dangote said “I was shocked when I visited Brazil in 1997 and discovered that another third World country similar to Nigeria, had huge manufacturing complexes providing jobs for its citizens and developing the country’s economy. I realized that if they could do it in Brazil, we could replicate the same in Nigeria”. With this realization, Dangote Group adopted a strategy of backward integration, investing in the local manufacturing of the products they were hitherto importing into Nigeria.

Today, the Group’s activities encompass: Cement – Manufacturing & Distribution, Sugar – Manufacturing / Refining & Distribution, Flour & Semolina – Milling & Distribution, Pasta – Manufacturing & Distribution, Salt – Refining & Distribution, Food Seasoning – Production & Distribution of stock seasoning cubes, Vegetable Oil – Refining & Distribution, Tomato Paste – Manufacturing & Distribution, Crude Oil Refinery – Refining & Distribution, Petrochemicals – Refining & Distribution, Fertilizer – Manufacturing & Distribution, Packaging Materials – Manufacturing & Distribution, Logistics – Port Management & Haulage, Real Estate and Food & Beverages

The story of Dangote Group as told by Alhaji Aliko Dangote at the 38^th convocation lecture of Ahmadu Bello University Zaria has a clear message to our teeming youths; entrepreneurship spirit is the driving force for success in a business. Ability to stay focused and persevere in the face of overwhelming challenges is the quality of good entrepreneurship.  Yes, you can start your business today; use entrepreneurial doggedness to become another Dangote in a few years to come. Today can be your starting day, best of luck!  

Use of Adopted Village Concept for Agricultural Technologies Transfer in Nigeria (II)

Use of Adopted Village Concept for Agricultural Technologies Transfer in Nigeria (II)

The adopted village concept involves the process of technology transfer and adoption of the improved packages released by the National Agricultural Research Institutes (NARIs) to the farming communities around the NARIs. The approach brings together the researchers and extension agents working on the farmers’ field to provide solution to the identified field problems. This approach is beneficial to the farmers because they are involved in the planning, development and demonstration of the new technology, which ensures the adoption of the technology. The approach also demonstrates the impact of group activities on productivity and income of the farming community as a whole.

In 2009, the Agricultural Research Council of Nigeria (ARCN), Abuja reinvented the Adopted Village/School Concept by directing all the 15 National Agricultural Research Institutes (NARIs) and 11 Federal Colleges of Agriculture (FCAs) to establish adopted villages and schools within 20 km radius from their respective Head Offices. Such adopted villages and schools are to serve as laboratories for showcasing agricultural technologies developed by the research institutes. Thus, the offices of adopted villages serve as Agricultural Research Outreach Centres (AROCs) managed jointly by farmers and the NARIs/FCAs. The adopted villages serve as field laboratories and another viable approach for agricultural extension delivery services. In addition, NARIs and FCAs use the adopted villages to make direct impact of their research activities on their hosting communities thereby creating cordial and mutually beneficial relationship.

Basically, the objectives of the adopted schools are to: raise interest among the secondary school students in agriculture and home economics; increase number of students taking agricultural science and home economics in the West Africa Examination Council (WAEC) and the National Examinations Council (NECO) examinations; increase percentage of students to obtain credit in Agriculture and related subjects in WAEC and NECO examinations; increase percentage of the school graduates who read agriculture in tertiary institutions; increase percentage of the school graduates who go into agriculture as a business; increase adoption of improved technologies in school farms; and increase adoption of improved technologies in family farms of the students

Thus, ARCN directed NARIs not consider the villages as mere field laboratories but as impact villages because the gains from research are not self-evident, research may not receive appropriate levels of support or guidance unless promising results are discovered and disseminated. Therefore, the adopted villages become showrooms for convincing government and donor agencies that investment in research and extension is a worthwhile venture. The NARIs and FCAs were directed to ensure that technologies to be promoted in the farming community of the adopted villages should be economically viable, technologically simple with cultural compatible of the farming system in the communities. This was done to ensure successful adoption.

The performance evaluation of the adopted villages and schools was conducted two years after introduction of the concept. The result of evaluation was highly impressive and thus, the need for up scaling the concept became necessary.  This became possible with the commencement of West Africa Agricultural Productivity Programme (WAAPP-Nigeria) in April, 2013, a World Bank - ECOWAS funded agricultural project in West African region

WAAPP – Nigeria financially supported, coordinated and monitored the dissemination of technologies by NARIs through the adopted villages when the project was still operating partial implementation. The Number of adopted villages then was 52; as at June 2015, the number of adopted villages had increased from 52 to 296, an increase of 469%. Likewise, the number of adopted schools had also increased from 52 to 182, an increase of 250%. The number of beneficiaries of the improved agricultural technologies from the NARIs also increased tremendously from 17,789 Beneficiaries in 2012 to 575,785 in June 2015. These figures of beneficiaries included the number of farm families.

The increase in the number of adopted villages, adopted schools and number of beneficiaries could be attributed to the progressive steps taken by WAAPP Nigeria to meet its overall target of 1.5 million beneficiaries at the end of the project period. Firstly, the distance between a research institute and an adopted village was increased from 20 km radius to 50 km radius and the number of villages was also increased from at least 2 to at least 5. This had made the NARIs to increase the number of adopted villages under their purview, with some having more than 20 adopted communities. Secondly, WAAPP increased the number of partners in the NARIs from 26 in 2012 to 41 as at June 2015 (58% increase). Thirdly, adequate monitoring and supervision of adopted village activities were giving top priority. Thus, an M&E support team was constituted for each NARI by the project to assist in the monitoring of activities in the communities and give suggestion for quick intervention. As at the end 2016 when first phase of WAAPP-Nigeria projected ended, National Agricultural Research System and 14 Universities were able to establish 334 adopted villages with about 800,000 farm families beneficiaries and 191 adopted schools with about 75,000 students nationwide. The effort met a hiccup as the facilitation support from the project was stopped, which made many adopted villages suffered a setback.

Fortunately, National Agricultural Extension and Research Liaison Services (NAERLS) was one the 15 NARIs, which partnered with WAAPP – Nigeria to use adopted villages concept for extension services. NAERLS picked up the gauntlet and advanced the use of adopted village concept to transfer improved agricultural technologies and innovations to rural areas nationwide. NAERLS is a famous vanguard in agricultural extension research and capacity development. NAERLS started with the establishment of seven adopted villages and seven schools across the nation in 2009. Today, NAERLS has closed to 200 adopted villages and 150 schools in 33 local governments Areas with direct involvement of about 30,000 farmers across the ten states in the six geo-political zones of Nigeria. NAERLS facilitated farmers to acquire knowledge and skills for enhancing their capacity to increase agricultural productivity and incomes. Thus, farmers were supported to create institutions, which enable them to effectively organise, formulate and prioritise their needs for appropriate agricultural advisory services. Facilitation activities centre on input support, advocacy visits and farmer groups educational trips to research institute or other farmers group projects for acquiring new knowledge and exposure. Specifically, the groups were organized and linked to credible sources of inputs. Similarly, NAERLS made provision of credit facilities to the groups for the purchase of improved farm inputs and services aimed at enhancing the groups’ productivity.  In April, 2013 wet season, NAERLS made N7 million, an interest - free loan available to ten of the groups and by January, 2014, the loan was 100 % recovered.  During the 2014 wet season, as more groups came on board beyond the financial ability of NAERLS to provide soft loan, the groups were linked with ABU Microfinance Bank for credit facilities. Accordingly, 23 farmer groups applied and obtained loan from the Bank worth 21,350,000.00 Naira to purchase fertilizer. In subsequent years, 2015, 2016 and 2017, loans of N45 million, N78 million and N120 million were granted to the farmers of NAERLS adopted villages that benefitted tens of thousands small-scale farmers across the country. Interestingly, the loan was 100 % recovered using adopted village concept. The NAERLS adopted village credit facilities – model becomes a shining example the agricultural creditors in Nigeria. In this way, farmers access fund for the purchase of the needed farm inputs without any financial support from NAERLS or government. The success of the loan recovery in the last six years were as a result of capacity building and guidance on how to use credit facilities to increase productivity instead of becoming a burden. Many technologies and good practices were transferred to farmers through practical teaching and establishment of demonstrations plots with the full participation of farmers groups.

In conclusion, the use of adopted village concept is proved to be an effective way of teaching farmers how to adopt new technologies and innovations that can revolutionalise Nigerian agriculture to attain a high level of food security within a shortest possible time. The concept promotes cost sharing between farmers, government and other relevant stakeholders to enhance agricultural productivity and reduce poverty. This is a pathway to reduce unemployment, poverty and increase sustainable agricultural productivity in Nigeria.

Use of Adopted Village Concept for Agricultural Technologies Transfer in Nigeria (I)

Use of Adopted Village Concept for Agricultural Technologies Transfer in Nigeria (I)

Poverty is one of the fundamental challenges confronting Nigeria especially in the rural areas. It is reported that more than 50 % of Nigerians earn less than two US dollar a day. The existence of wide spread poverty in the rural and urban areas despite the high food production potentials is inconsistent with the principle of sustainable development. In the 1960s and 70s, Nigeria was largely self-sufficient in food production in addition to exportation of agricultural commodities in large quantities to many countries. For instance, in 1960s, Nigeria dominated the rest of the world in Cocoa, Groundnut, Oil palm, Cassava and Cotton productions. Then, Nigeria accounted for 42 % of the world production of Groundnut, 27% of Oil palm, 18% of Cocoa, 38% of Cassava and 1.4% of Cotton, respectively. Today, the situation has changed and the food insecurity is looming in every cranny of Nigerian environment. In 2012, Federal Ministry Agriculture and Rural Development reported in its "The Green House Publication" that Nigeria spent averagely N635 billion importing wheat, N356 billion on rice, N217 billion on sugar and N97 billion on fish annually. The import of food items has grown to unsustainable rate of 11% per annum.  The situation is likely to deteriorate if urgent steps are not taken to put the country on the path of sustained agricultural growth.

Nigeria's decline in agricultural production according to indices is attributed to various challenges ranging from very low usage rates of agricultural inputs to low mechanization intensity.  Experts from within and outside Nigeria’s shore subjected these problems to deep analysis at different fora and the conclusion is that Nigerian farmers are inaccessible to effective agricultural extension advisory services. This has been responsible for low yield per unit farmland of many crops thus, making farming to be unprofitable and unattractive to generality of Nigerians. In recent years, agricultural extension and advisory services have been facing many challenges at different levels from local government authority to federal government level.

The major challenges of Nigeria's agricultural extension and advisory services have been identified by experts to include lack of coherent extension policy, compounded by policy inconsistencies in the agricultural sector; grossly inadequate and timely funding; poor leadership and coordination, low private sector participation and a very weak Research-Extension-Farmers-Inputs-Linkages (REFIL) system driven by ineffective top-down, supply-driven, extension approaches. These issues have to be addressed to build sustainable agricultural development that can ensure food security to the nation.

Over the years, Nigeria has tried several Agricultural Extension approaches in a deliberate effort to attain the goal of self-sufficiency in food and fibre production. Some of the approaches were highly appreciated and consistent with the diverse nature of Nigeria agricultural systems, policies and practices while others made little impact on the agricultural system. The most popular one is the Training and Visit (T and V) system that started in the 1970s and continued till date. T and V system was responsible for the creation of the Agricultural Development Programmes (ADPs) present in all the 36 states and FCT. The system considers extension as a professional work and seeks means to make it effective, efficient and attractive to the clienteles and practitioners.

T and V Extension System is a simple agricultural extension approach but consists a chain of events that must be followed to make it effective. However, the system requires having competent and well-informed (through continues training) personnel to operate it for good results. The essential activity of T and V is the regular visit of extension agent (EA) to farmers with relevant messages and bringing farmers problems to the research centres. The methodology for the T and V system differ from place to place depending on the agricultural situation, social and administrative conditions. Nevertheless, the essential feathers of the system are continuous training, visits, supervision, monitoring and evaluation of activities. Similarly, the key characteristics of the system are professionalism, single line of command, concentration of effort; time bound work, regular field and farmer orientation, continuous training and linkages with research centres.

Professionalism implies that extension staff must have the capacity to identify constraint, diagnose the real field problems and recommend means of solving such problems. This requires provision of necessary support (materials, skill development and logistics support) to the staff to provide this professional job. Single line of command entails that a Professional Agricultural Extension Services must be on one line of technical command and administrative control (top-down approach), which some people fault as undemocratic and un-participatory. Another important feature of T and V system is linkages with Research Centres, extension depends on research for technical recommendations suitable for specific problems and local situation. Thus, Research Centres must support the condition necessary for T and V system to make visible impact on the farmers’ productivity. The centres have to coordinate with extension units to address farmers’ productions constraints. Therefore, operating T and V system as a effective extension approach requires taking appropriate decision to set priorities, concentration of efforts in a few but identifiable goals at a time and showing/exhibiting commitment to professionalism.  Playing down any of the essential features may make it the weakest link of the chain thereby causing the system ineffective.

T and V system was effectively working under the ADP when it was under the World Bank funding and appreciable results were recorded. However, the system has ceased to be effective with the stoppage of World Bank funding since 1990s despite the existence of ADP structures in all the states and FCT. Thus, Nigerian farmers have since forgotten about ADPs and the T and V system. This is why the new approach of introducing the concept of "Adopted Village" became a welcome development to many stakeholders.

Adopted Village concept was one of the innovations introduced into the Nigerian agricultural research by National Agricultural Research Project (NARP) in 1997. The concept originated from India for agricultural technology testing on the farmer's field and eventual transfer to the teeming farmers of India. Scientists under the farmers’ environmental conditions initiated it to facilitate the trial of new research findings. Advantages of this concept are numerous; farmers involvement in the farm technology trials either as observers, in the case of researcher managed, or executors in the case of farmer managed trials, farmers' interaction with researchers and vice-versa, etc. It is assumed that farmers’ involvement can speed up the rate of adoption of agricultural technologies to other farmers since the trials also served as a demonstration plot. In the Adopted Village scheme, technologies generated in research institutes are introduced and disseminated to farm families in the adopted villages.

In 2009, the Agricultural Research Council of Nigeria (ARCN), Abuja reinvented the Adopted Village Concept by directing all National Agricultural Research Institutes (NARIs) to establish adopted villages and schools within 20 km distance from their respective Head Offices. Such adopted villages and schools are to serve as laboratories for showcasing agricultural technologies developed by the research institutes. Thus, the offices of adopted villages serve as Agricultural Research Outreach Centres (AROCs) managed jointly by farmers and the NARIs. The adopted villages serve as field laboratories and another viable approach for agricultural extension delivery services. In addition, NARIs use the adopted villages to make direct impact of their research activities on the host communities thereby creating cordial, mutual and beneficial relationship.

In addition, ARCN directed NARIs not consider the villages as mere field laboratories but as impact villages because the gains from research are not self-evident, research may not receive appropriate levels of support or guidance unless promising results are discovered and disseminated. Thus, the adopted villages are expected to be showrooms for convincing government and donor agencies for more investment in research and extension as a worthwhile venture.

National Agricultural Research Institutes (NARIs) were able to establish 104 adopted villages and adopted schools nationwide within the first two years of re-introduction of adopted village concept in Nigeria. The results of using adopted villages were impressive and thus, the need for up scaling the concept became necessary.  This became possible with the commencement of West Africa Agricultural Productivity Programme (WAAPP-Nigeria) in April 2013, a World Bank - ECOWAS funded agricultural project in West African region. (To be continued)