At $15 billion, Aliko Dangote is worth more than 8 African countries

According to Bloomberg Billionaire index, Aliko Dangote became $4.3 billion richer in 2019 as he ended the decade with a net worth of almost $15 billion, making him the 96th wealthiest man in the world.

The staggering $15 billion is more the GDP of eight African countries, while the International Monetary Fund (IMF) has lowered the outlook for the continent, but economists see the economies of Rwanda, Ivory Coast, and Ethiopia to grow in 2020.

Africa’s GDP was $2.45 trillion in 2019, per latest data from the International Monetary Fund (IMF), and Aliko Dangote net worth is 0.61 percent of that figure.

Compared to Nigeria, the continent’s largest economy with a GDP of $441.91 billion in 2018, the business magnet’s market cap represents 3.30 percent. Interestingly, Aliko Dangote’s market value is 2.20 percent of Economic Cooperation of West African States (ECOWAS) GDP of $668.60 billion GDP in 2019 as he is richer than 30 African countries.

Somalia has a GDP of $7.90 billion, Eritrea, ($7.71 billion); Malawi, ($7.43 billion); Togo, ($5.59 billion); Mauritania, (5.56 billion); Eswatini, ($4.46 billion); Sierra Leone, ($3.99 billion); Burundi ($3.57 billion); Liberia, ($3.22 billion).

Other countries’ economic sizes are as follows: South Sudan, ($3.15 billion); Lesotho, ($2.81 billion); Djibouti, ($2.39 billion); Central African Republic, ($2.28 billion); Cabo Verde, ($2.04 billion);The Gambia, ($1.74 billion); Seychelles, ($1.65 billion); Guinea-Bissau, ($1.53 billion); Comoros, ($726 million), and São Tomé and Príncipe, ($477 million).

Aliko Dangote’s net worth is 38 percent of the Nigeria’s external reserve of $38.61 billion.

The country’s external reserves has been falling since October last year as crude oil price continues to be volatile, and the bedlam in the Middle East that sent oil price temporarily upwards wasn’t enough to add strength to the foreign exchange reserves.

Analysts call on policy makers to jettison the multiply exchange rate because it makes foreign loss confidence in the economy, hence, undermining foreign direct investment.

Lack of policy direction on the part of government is also responsible for investor apathy towards the country’s equity market.

The 62-year-old billionaire and Africa’s richest man with interests in cement, flour, and sugar estimates Dangote Group revenue to hit $30 billion by 2021, thanks to earnings from a new oil refinery and petrochemical plant due to start production next year.

He is building a $12 billion, 650,000 barrel-a-day refinery in Lagos, Nigeria’s commercial capital.

Dangote plans to expand his cement business so as to increase a share of the market and the company is the largest producer of the building material in Sub Saharan Africa.

Last year, he told shareholders that he plans to add six million tons in Nigeria next year, taking volume in the company’s home market to 35 million tons. The rest of the expansion is planned mainly in West Africa, including Niger and Cote d’Ivoire.

Two years ago, he told shareholders in the company would open plants in Nigeria that would allow it export clinker to grinding plants in Cameroon and West Africa.

The cement business has strong export potential as capacity utilisation in Nigeria is a notch below 50 percent, as the company said it would employ unutilised capacity in Nigeria to export clinker to its grinding plants located across West African Coasts – Togo, Ivory Coast, Liberia, and Ghana.

Analysts expect a ramp-up in production in Tanzania, Sierra Leone, and Congo to help support sales volume in Pan Africa.

Analysts at Cordros Capital said in a recent report that the company’s scale, superior margin, and exceptional portfolio diversification isolate it from peers in the Nigerian cement market.

“In our view, the company is firmly positioned to benefit from our projected cement demand growth, given its bourgeoning investments in trucks, which makes product delivery across the country seamless,” said analysts at Crodros Capital.

The country’s huge infrastructure deficit and Federal Government proposed infrastructure spend are expected to accelerate demand for building material, a boon for Dangote cement and peer rivals.

Nigeria requires $15 billion (N4.59 trillion at N306 to a dollar) worth of investments annually for 15 years in order to adequately develop its infrastructure nationwide, the Financial Derivatives Company, an economic and financial research firm.