If this man made billions in Nigeria why can't we ?

As someone who was involved in the commodities sector, I was recently reading a report of how the world's largest oil refinery is being built by a tycoon named Aliko Dangote from Nigeria. Nigeria is one of the hotspots for growth in Africa.

He built a fortune that makes him worth $10+ billion apparently.

Stephen Schwarzman with him .
http://investorsking.com/wp-content/uploads/2016/0...
Interesting youtube doc on him "Golden Child of Africa" - richest black man on earth

Interesting personality all round. Sugar, Oil, Cement, Pasta, Milk. Dangote is like Bungee + Koch + ADM + Glencore all in one.

I wonder why very few people take the industrial entrepreneur path ? Everyone wanting to cash in on some get rich scheme is into finance or tech start-ups these days. Amazing how he did it all right at home. Quite the personality.

Comments (31)

Sep 7, 2017

Where did the seed money for all this come from. Is he one of those princes ?

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Sep 7, 2017

This is an overly simplistic answer, but Nigeria's economy is not nearly as mature as those of the U.S. and Western Europe. As these are information focused economies, there is naturally a lot of money to be made in tech.

Sep 7, 2017

Think he gave Bill Gates a lift when his private jet broke down in Africa.

Sep 8, 2017

This dude is a monopolist. Uses his crony connections with nigerian government to block imports and then with massive scale price-drops and squeezes everyone else dry. he captured a chunk of NIgeria's economy with pretty illegal maneuvers.

Jan 6, 2019

monopolists are okay as long as they're american, that's what you're saying, right? idiot

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Jan 6, 2019
Rashers:

monopolists are okay as long as they're american, that's what you're saying, right? idiot

You're a moron of galactic proportions, it's a biblical miracle your mom was able to fit you through her snatch. First you allege that I implied monopolists are ok only if they're American - which I didn't - then you turn it around and phrase it as it were a question - which is amusing because your own allegation became dubious which you first asserted and then questioned yourself - and then you jump to labeling me an idiot with absolutely 0 basis. A proper spam post. You sure you didn't win the Internet Trolling Olympiad .

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Jan 9, 2019
papertiger:

then you turn it around and phrase it as it were a question - which is amusing because your own allegation became dubious which you first asserted and then questioned yourself - and then you jump to labeling me an idiot with absolutely 0 basis. A proper spam post. You sure you didn't win the Internet Trolling Olympiad .

saving this for future reference...

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Jan 9, 2019

I feel like there's a way of reading his criticism as being something like "you'd be okay with it if it were vitol or glencore" which, given your other post where you effusively praise mark rich because of his willingness to engage in unethical behavior to succeed, seems like it might be valid.

Jan 9, 2019

maybe maybe not. but i don't get the name calling and ad hominem verbal assaults with 0 logic. amazing people of such standards are posting on this forum. but then again i think he's trolling till the printed alphabets on his keyboard wear off haha

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Jan 9, 2019

Fair enough. Also reading your other posts in this thread it seems like I misread your criticism of dangote as less nuanced then it was (I.e. I thought you were selectively applying the criticism that: "he ain't shit cus he's corrupt" vs. the more interesting: "it's easier if you're the local guy"). Sorry to butt in.

Jan 10, 2019

this made me cringe so hard i almost passed out. when did this board turn into reddit?

Jan 10, 2019
hawketrackler:

this made me cringe so hard i almost passed out. when did this board turn into reddit?

I don't use reddit. How does this resemble reddit

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Jan 6, 2019

interesting interview (lunch with the ft) with him

https://www.ft.com/content/50f53eac-8370-11e8-96dd...

Jan 7, 2019

I wonder why very few people take the industrial entrepreneur path ? Everyone wanting to cash in on some get rich scheme is into finance or tech start-ups these days

Because it is insanely risky and requires a ton of start up capital? Tech startups have little overhead, and lets face it, don't even need to be feasible or intelligent ideas to get insane valuations.

In addition to the pure real estate issues that come with entitling land for constructing a specialized industrial building, you need to have the connections to manage your supply chain and an idea worth pursuing. Not to mention a shitload of cash. That's no longer a startup; you need a mature business idea and experience in executing on it before you can even think of raising money. Compare that to most tech startups, which get underway on a wing and a prayer and try to figure out whether it's a viable idea or can raise VC money afterwards

What I find amusing is every time a story comes out about someone who made a ton of money in an unusual way, people come out of the woodwork to say "why don't other people take this path" as if there aren't likely to be thousands of people who tried this exact same thing and failed miserably for every one that makes billions of dollars.

Jan 8, 2019

I sadly have to concur about the validity of your points. I've read tons of books on self-made billionaires, and what strikes me about the heavyweights is the unusual combination (read deadly as well) of risk and luck, not to mention their inhuman risk tolerance.

Dangote's employee was murdered in Ethiopia during a property vandalizing attempt. This right here kind of tells you the price the Nigerian magnate is paying to maintain his spot on Forbes. Insane.

Jan 7, 2019

Well, your start-up costs would probably include a $1 million line item for bribery (on the low end). U.S. law prohibits bribery even in your foreign business (Foreign Corrupt Practices Act), so you'd be starting off by committing felonies under U.S. law. Not a particularly auspicious start to business success.

Jan 8, 2019

FCPA is a hindrance to American passport holders no ? I believe corrupt wealth is much easier to attain for non-Americans. US DOJ and FCPA have been nailing crooked get rich quick schemers with American passports than any other unilateral force.

I'd imagine it's much easier to become a billionaire in Africa where you can buy the law and write rules of the game than it is anywhere else on earth. Dangote must be a pro. Imagine the level of dead skeletons this guy must have buried to get to where he is:

Bribed politicians, bribed bankers, buried lawsuits, employee lawsuits that don't even go to court, bent over judges, penalties and fines that never get raised, taxes that don't get paid.

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Jan 8, 2019

My best friend is a U.S. citizen immigrant from Bolivia. I asked him years ago why socialism (like, real, true socialism, not Nordic welfare states) was so popular in Latin America--"Why don't they look at the U.S. and see our model for success and try to emulate it?" I asked. Well, he basically told me that nearly every rich person (or a disproportionate number) in Latin America became rich through corruption. So the Latin American public looks at all the wealth of the United States and assumes it was stolen or gotten through corruption.

It really crystallized for me why voters in poor countries gravitate towards socialist/fascist economic models--because they understand that in Nigeria, for example, the "free market" allows you to pull yourself up by the bootstraps by bribing and extorting your way to the top. In their ignorance, they believe that corruption is a function of the market, and the politicians who promise to fix the corruption hold the moral high ground.

Jan 10, 2019

You think the US model isn't just as corrupt, just in different ways? Ha.

Jan 10, 2019

There's definitely corruption in the us but it's certainly not just as corrupt, that's a pretty high bar to set.

There are some pretty average joes in America who start their own small businesses, work for big companies, or are lawyers/doctors and build up 10+ mil net worth without ever breaking the law or doing deals under the table. Can you say that about Nigeria?

Fuckin my way thru nyc one chick at a time

Jan 10, 2019

Point taken. I would still argue that at the upper strata (e.g. federal politicians, people with 100 million plus net worth) which is where this guy operates, the corruption is just as prevalent. Bribery and blackmail are simply tools of the trade at that level.

Jan 10, 2019
dsch:

Point taken. I would still argue that at the upper strata (e.g. federal politicians, people with 100 million plus net worth) which is where this guy operates, the corruption is just as prevalent. Bribery and blackmail are simply tools of the trade at that level.

Depends on the state. The Democrats that run Maryland are utterly corrupt--most high level success is definitely at least partially due to unfair play. The Democrats who run Virginia, on the other hand, are largely above reproach and doing business in Virginia is a pretty straight and narrow.

Jan 10, 2019

The US is not even close to the kind of corruption you see elsewhere. It's like day and night. In America if employees file a lawsuit the owner is in trouble. Billionaires elsewhere cannot be touched by the law.

Having said that, the US used to be amazingly corrupt right on par with Russia.
Does anyone remember the guilded age with robber barons ? That was an era that was pretty sordid.

Jan 9, 2019

I think the hardest thing is developing local market knowledge. You can get in real trouble pouring resources into something you don't particularly understand.

Jan 10, 2019

Yeah no kidding. A famous and really scary story is that of some American businessman who was murdered in Russia over a business deal gone wrong. That's the shit that even horror movies can't capture. One day you're on top of the world, the next day someone just knocks you out with a silencer pistol.

I forgot that lad's name, but if you google Radisson hotel moscow murder I'm sure the interested will see more on the story.

Jan 10, 2019

I did some business with his companies, specifically some financing transactions, and his companies are full of formers investment bankers and top corporate guys.

He started when nobody else even thought to do something in Nigeria... Working with cement, which was something almost innovative in the 80s in Africa and diversifing wih great ability in many other businesses like sugar and food production.

Jan 10, 2019

You Nigerian ? Can you explain what are the various challenges of doing business in Nigeria ? Like the sheer kind of complexity and wide depth and scope of things someone like Dangote would have to go through besides all the obvious stereotypical stuff ?

If he really bet big when nobody else was on the move, kudos to him. My guess is he saw the growing population and per capita consumption and decided to zero down on future growth sectors. He looks like he reads a lot of analyst reports .

Jan 10, 2019

I am not nigerian I am South European and I work in a bank involved in many large financing in favour of big clients especially from developing regions.

He started when he was very young (1970s) just trading materials in Nigeria creating a very large web among business and people, a period during which he probably understood many business dyanmics and business men and, crucially, it was a boom period in Nigeria.

Hence, as typical booms, infrastrucutures and buildings start to be built... and he entered in cement business.. now he is the largest cement producer in his area. He then diversified in many business always managing leverage and shareholding of his projects and subsidiaries. He owns the second largest sugar refinery in the world (!!!)

A key element of his businesses is that he owns the entire supply chain, from the production to the distribution (he even owns 100% of vans used), exploiting an area with relant oil reserves (and Negerian oil is of great quality also) and cement reserves.

I think he was able to exploit in the right way relative to natural resources the area in which he was born, during a developing period and managing in the right way his businesses (majority shareholder, small amounts of debt, integrated offer)

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Jan 10, 2019

From wikipedia: Aliko Dangote, an ethnic Hausa Muslim from Kano, Kano State, was born on the 10th of April 1957 into a wealthy Muslim family. He is the great-grandson of Alhaji Alhassan Dantata, the richest African at the time of his death in 1955.

As usual, WSO doesn't tell the whole story. While I respect his accomplishments, he is a dude that was born rich that capitalized his wealth to become filthy rich.

Jan 10, 2019
Jan 10, 2019

What concert costs 45 cents? 50 Cent feat. Nickelback.