Still on Dangote as catalyst for Africa’s industrialisation

In the global space, Aliko Dangote is rapidly redefining the narrative on exports from Africa. The old order, where the continent was known as a “raw materials export zone” is currently going away and fast disappearing from international trade configuration. This major shift repositions Africa from a very unimpressive performance level in global manufacturing, where the continent accounts for less than two percent of global exports of finished goods. As Dangote, now widely acclaimed “Africa’s industrialisation catalyst”, pushes harder to assert a rightful place for the continent, other local private investors in value-added manufacturing in Africa are urged to step up to keep the momentum of value addition to Africa’s natural resources as raw materials. 

This can be done through the optimal utilisation of Africa’s capital stock, which is already being aggressively unleashed in most economic sectors by Dangote. The strategic economic engagement is now shifting from the finished products importation “madness” to an import substitution industrialisation policy. This particular trade strategy, of replacing foreign imports with domestic production to reduce foreign dependency, as being championed to promote local industries, has come to stay. Dangote has substantially proven to be Africa’s industrialisation “catalyst” by his exploits in the manufacturing sector.

Africa is a continent that is expected to develop her economic potentials, to become a finished products self-sufficient economy and at the same time, as a processed commodities export hub cutting across most economic sub-sectors; by building strong institutions and supporting entrepreneurs. Dangote in his leadership wisdom is visionary, taking the lead for Africa’s industrialisation; with tireless efforts on expanding Africa’s refining capacity, as planned by the Dangote Group. The economic attractions for these proposed expansionary projects on crude oil refining and on gas value chains are in the production of byproducts and hydrocarbon derivatives that are further processed and reprocessed into petrochemicals. With Dangote as the continent’s industrialisation catalyst, economists and financial experts know that the expected astronomical turnaround speed for wealth creation in the nearest future, observed through this given manufacturing trajectory, shall enormously reposition the continent’s economic growth profile very highly.

Borrowing from the comments of Olusegun Oludapo Sogbesan, a professor of economics, that “Africa’s greatest wealth is not underground. It’s in our institutions and entrepreneurs”, and the entrepreneur and philanthropist, Tony Elumelu, that “Africa’s greatest wealth is not its resources, it is the institutions we build and the entrepreneurs we empower to create lasting prosperity”, one is convinced that the economic growth of the continent solely rests on the total engagement of its capital stock, subjected through the manufacturing process to make finished products, through value addition by local investors. These finished products are to satisfy domestic demands, as well as for shipments to foreign markets, with full export economy status, for shared prosperity within the continent.

Dangote has already started the outbound shipment operations at its Lekki business corridor, which also has an export processing zone status for the shipment of refined products, fertilizers, and other petrochemicals, to foreign markets, with payments made to Dangote Group in dollars. The tension in the Gulf region is not unconnected to the export sale arrangement with its growing foreign customers, seen as a great opportunity for a wider clientele base outside the shores of Africa. However, while seeing this as sales progress that would trigger economic growth, and also strengthen the value of local currencies, it is important to acknowledge potential drawbacks on local markets and consumers who may be faced with reduced supply volumes due to export preference to earn foreign exchange. This will naturally pressure local market pricing of the affected products that may result in price inflations.

But such a scenario could be controlled if strong institutional frameworks are operational in the continent. Intra-continental trade policies like the AfCFTA commitments, therefore, could be enforced to assure local demands, whenever the export market makes overbearing demand for exports over and against the optimal volumes needed to satisfy domestic consumers. Financial institutions in Africa are also expected to drive the course of continental economic growth by empowering the entrepreneurs to stabilize their production bases through well established industrialisation programmes for purposes of creating jobs for the unemployed, and dragging a lot of families out of poverty. These achievable landmarks and macroeconomic goals for the continent are now knocking on every door of African entrepreneurs. These represent low hanging fruits that are positioned on the continent by the visionary efforts of Dangote, who has made himself the “catalyst” and “crusader” for Africa’s industrialisation.                         

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SUNNY CHUBA NWACHUKWU

Sunny Nwachukwu (Loyal Sigmite), PhD, Fellow (ICCON, CSN, SM), a pure and applied chemist with an MBA in management, is an Onitsha based industrialist, and former vice president (finance), Onitsha Chamber of Commerce. He can be reached on +234 803 318 2105 (text only) or schubltd@yahoo.com