In 1977, 21-year-old Aliko Dangote returned to Nigeria after university with a $3,000 loan from his uncle. Nigeria’s economy was heavily reliant on imports—everything from sugar to cement came from abroad. Local manufacturing was almost nonexistent. Dangote started by trading commodities like sugar, rice, and flour, buying in bulk and selling to retailers. But he quickly realized that trading had limits. To build real wealth, Nigeria needed domestic production. The challenge was building factories in a country with unreliable power, poor infrastructure, and political instability.
The Turning Point
In the 1990s, Dangote shifted from trading to manufacturing. He built sugar refineries, flour mills, and salt processing plants. The game-changer came in 2007 when he entered the cement business. Nigeria was importing expensive cement while its construction boom was exploding. Dangote invested billions building Africa’s largest cement plant, Obajana, with a capacity of 46 million tons per year. He vertically integrated, controlling quarries, manufacturing, and distribution. Within years, Nigeria stopped importing cement entirely.
The Strategy
Dangote’s strategy was import substitution on steroids. He identified products Nigeria imported in massive quantities, built world-class factories to produce them locally, and undercut imports on price while maintaining quality. He reinvested profits into scaling production and expanding across Africa. He built his own power plants to ensure reliable electricity. He cultivated relationships with government while remaining focused on operational excellence. He also went pan-African early, expanding Dangote Cement to 10 African countries before competitors realized the opportunity.
The Results
Today, Aliko Dangote is Africa’s richest person with a net worth exceeding $13 billion. Dangote Group is the largest industrial conglomerate in West Africa, with revenues over $4 billion annually. Dangote Cement is Sub-Saharan Africa’s largest cement producer. He’s now building Africa’s largest oil refinery in Lagos—a $19 billion project that will refine 650,000 barrels per day. Dangote proved that African entrepreneurs could build globally competitive businesses while transforming their continent’s economy.
