Nigeria, Others to Benefit From Dangote’s $5b Power Investment

World Economic Forum on Africa 2011

NIGERIA, Ghana, Togo and Tanzania will benefit from the Dangote Group’s fresh investment capital, its President, Alhaji Aliko Dangote, has said.

Speaking at the United States (U.S).-Africa Business Forum in Washington on Bloomberg Television’s“Market makers,” he said the money will be invested in power generation, distribution and transmission infrastructure, adding that the deficit between what is available and what is needed is “enormous”.

He said: “Well, it is going to be in the sub-Saharan African countries, mainly Nigeria, Togo, Tanzania, and Ghana, the likes of them. We are going to really invest this money in terms of generation of power, transmission of power, distribution of power, infrastructure, in terms of gas pipelines, to make sure that we unleash the opportunities. When you look at it really, the gap especially in power generation in Africa it’s enormous.

“And we saw that and then we agreed that, look, let us now team up, the big corporations to put money (down in the ratio of) 50/50. We are already going to go into a 50/50 agreement where they put 50 per cent of the money, you put 50 per cent of the money and we will roll out.

On the Chinese footprints on the continent, Dangote said the Chinese do not engage in 50/50 partnership, adding that they prefer to go on their own.

“Well, the Chinese, normally they don’t actually do 50/50. They hardly take locals. They go on their own. But the Chinese are not in the kind of things that we are doing. And they’re not normally in cement, energy and power.

They are in railroads, but they are also – mainly Chinese companies are looking for contracts to do things, or mineral sources. And what we are trying to do now is to say: hei look, we don’t want people to now come and take our mineral resources. We want them to process these mineral resources locally so that they develop our own people, they can train our own people. That is the way it can be a win-win situation,” he said.

He restated the commitment of the Group to building its 500,000 barrels of oil refinery with a petrochemical complex with it in the country.

Actually, it’s not about execution. It is about the demand growing. And the answer is yes. The demand is growing. Well, as a company, what we have always been doing is to look at what can we do to bring our costs down. So, even if margins will go down, but once the cost is down, then you’ll be able to maintain your margin. What I am not saying is, we must make this certain amount of money. Obviously, if you ask me in the next 10 years, are we going to  make the same money we are making per unit? No. That’s the answer,” Dangote said.

Justifying his firm’s investment in Zambia, he said there is a ready market for cement in that country.

“In some of those countries, when you look at Zambia, for example, Zambia has nine borders; they have nine borders with nine countries in Africa. And some of these areas, they are landlocked. They don’t have any manufacturing there. So, whatever you produce in Zambia you can actually take it to the next other countries and invest. It’s not normally for only the domestic market.

“Even though Zambia itself is a landlocked country, there’s quite a lot that could be done. What we’re not really targeting is a particular country in Africa. We are targeting regional markets. And so now, for example, in Nigeria, if I grow the business very, very, very large in Nigeria, I don’t just rely on Nigerian market, I rely on the Economic Community of West African States (ECOWAS) market,” he said

He expressed worries over the ravages of Ebola disease that has taken parts of the sub-region by storm, arguing that governments in the affected countries are trying their best to curtail the onslaught of the disease.

He said: “Well, yes. It is a worrisome issue, but the governments of the affected countries are doing quite a lot about it. The guy who came from Liberia, luckily fell ill right on board, so he was taken straight to the hospital. This means, we are lucky.  If he was actually somebody who had actually run in the city for a while, then it would have been a big issue, but he fell ill right on board and they were able to detect it and they were able to quarantine the person – he died there. And all the 59 people that he was in contact with, they’ve actually been contacted and some of them have actually been quarantined.

“The effect of the disease might be one per cent on business. But I am sure various governments, they are doing things to tackle the situation. Ebola had actually been around since the late ’70s. So, it’s not a new thing today. It’s just that people are panicking now, which I think yes is okay. It’s good for people to panic so that something could be done about it. But, right now, it has come to the attention of the Western world and I’m sure we’re going to find a cure for it soon, and also see occupying what is really causing Ebola so that we can attack it from that front.”

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