African Studies Centre Leiden, The Netherlands Dangote Cement: An African success story? Akinyinka Akinyoade & Chibuike Uche African Studies Centre Leiden ASC Working Paper 131 / 2016 1 African Studies Centre P.O. Box 9555 2300 RB Leiden The Netherlands Telephone +31-71-5273372 Fax +31-71-5273344 E-mail
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[email protected] Website www.ascleiden.nl © Akinyinka Akinyoade & Chibuike Uche, 2016 2 Dangote Cement: An African Success Story? Abstract This paper critiques the rise of Dangote Cement plc to become the dominant player in the Nigerian cement industry. Although the close relationship between the company’s founder, Aliko Dangote, and subsequent Nigerian governments has been an important factor in this success story, we argue that it is not the only explanatory variable. Dangote’s entrepreneurial skills and understanding of the Nigerian political and economic environment enabled him to proactively predict and exploit the rapid increase in demand for cement in the country. The reluctance of most multinational cement companies to increase their investments in Nigeria – a consequence of the ever increasing international scrutiny of business ethics especially in corruption prone countries – also helped reduce the competition and investment risks for Dangote Cement. Introduction Aliko Dangote, the founder of Dangote Cement, came to international attention in 2008 when, with an estimated fortune of $3.3 billion, Forbes magazine named him the richest person in Nigeria. By 2011, his net worth had risen to $13.8 billion, making him the richest person in Africa.1 In 2014, with a total net worth of US$ 25 billion, the equivalent to 5 percent of recently rebased Nigeria’s GDP, he became the twenty-third richest person in the world (Leadership, 4 March 2014).