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!