‘Political will can salvage Nigeria’s economy’ – Aliko Dangote

Aliko Dangote, Africa’s richest man spoke extensively on Nigeria’s economic state and the road ahead in an interview on CNBC; BusinessDay’s Lolade Akinmurele followed proceedings.
What is your take on Nigeria’s economy and what could be done to revive growth?

If you look at West Africa, most African countries despite the economic challenges are doing well. In Cote d’Ivoire, growth is still at about nine percent. Ghana recorded 4.9 percent in the second quarter. Even Togo has seen increased growth to about five percent. Benin republic is 5.2 percent. I can go on and on. It appears our case is more severe and I think one of the major problems causing this is the fact that 90 percent of government earnings is from oil. The only way to get out of this is to swing into immediate action; the kind of action that revolves around diversifying the economy quickly.
The real challenge for us is to have the political will in selling some government assets. I think it is an easier route than going to International Monetary Fund (IMF) or World Bank to borrow money.
This is because what we actually need to do is to beef up the external reserves. I am talking particularly about Nigeria here and how long I think we are going to get out of economic recession. As a businessperson, if I have challenges with funds, I would not hesitate in selling some of my assets to remain float and transit to a better condition. It wouldn’t make any sense if I kept any asset, suffocating the whole organisation in the process.

What is your message to investors who are witnessing recession for the first time?

It is not a market you just go and take a short term view. This is because if you do that, you will get it wrong. It is market you have to believe in first and aim for long term returns rather than short term.
Investors also need to disrupt their thinking and be more innovative. There is nothing like innovation in business. They have to believe in Nigeria and in Africa and they must also think long term. Once they have these three things sorted out, they are done. But of course they don’t have total control; government policies also shape their activities. So there must be consistency in policies.

A new Mckinsey report noted that accelerated industrialization could lead to a steep change in productivity and the creation of six million to 14 million jobs in ten years. What should government and businesses be doing today to accelerate industrialization?

What government should do is to work with the private sector and form a clear industrialization policy, which would provide for good incentives.
I know some people in government don’t even understand what incentives are. They take it as a way whereby funds are disbursed randomly, but that is not the case. In every country we operate in Africa, government earns more money through taxes, but they have to generate the economic activities so that they can benefit from higher taxes. Regarding the Mckinsey report, when you look at industrialization and manufacturing, you will find that these are sectors that could actually create even more than the ten million jobs. I believe it could be more.

In Nigeria, you have 187 million people, and by 2020 we will be 207 million. If we are going to be 207 million in only four years’ time, do we believe we produce more than 5 percent of the clothes we wear? The answer is no.
Majority of what we consume in Africa is being manufactured somewhere else, and brought into Africa. This is why I always say if we continue with imports, we are actually importing poverty into your country and exporting jobs out.

Conclusively, I think the tenor of the economic recession will depend on the political will of government.

LOLADE AKINMURELE