President of Dangote Group, Alhaji Aliko Dangote has told developed countries to promote investments in African countries rather than providing aids.
Dangote who was said to have spoke at the recent World Economic Summit in Davos, said real investment is the only way the continent can achieve real growth and development.
According to a statement, he urged the developed nations to encourage their businessmen to invest in Africa as the level of returns on investment (ROI) was high, instead of doling out aids and grants to African countries.
Dangote said that most people did not seem to know much about Africa, but had only a notion of the continent that was based on history or hearsay.
He enjoined the western nations not to “give any more aid to Africa” but to partner with businesses there and invest.
He said, “You will make money and we’ll make money and it’s better for everyone.”
Dangote who has investments in countries like Sierra Leone and Congo acknowledged that business risks existed in Africa but were no major consequences.
According to him: “Before, there was the risk that governments might nationalize assets, but now we have investment agreements in the country that says if it does get nationalized, they’ll have to pay us.”
He argued that few people at the conference knew much about Africa and instead relied on historical information or hearsay for its facts.
“I am not saying it is as good as elsewhere, but investment in the continent comes with almost the highest ROI in the world . In Zambia for instance, it used to be that Zambians had to hold 51 per cent of any business operating in the nation. Today, the law has changed.”
The parliament changed the law last year when Dangote who wanted to set up a plant there went to the government and told them he would invest $400 million but only if he got ownership.
Dangote has invested over $614 million (N93.64 billion) in cement production in three African countries, namely South Africa, Zambia and Cameroun.
The move, according to the company was to ensure that African remains self-sufficient in cement production and making the products easily available and at highly affordable costs to the end users.
The group recently reached an agreement with Cameroonian officials to invest about $100 million (N15.24 billion) to build a cement factory in Cameroun even as it plans to expand to other sectors of the local economy.
President Dangote Group Alhaji Aliko Dangote speaking on the development said “We have reached an agreement with Cameroonian officials. If the cement business succeeds our group will move into other domains of the Cameroonian industry”
Cameroon has only one cement producing company, CIMENCAM, with annual output of about a million tonnes from two plants. The planned Dangote cement plant when operational will increase the volume of cement produced in the country as well as drive down prices.
The planned investment in Cameroun is coming on the heels of the Investment Promotion and Protection Agreement between Dangote Industries Limited (DIL) and the Government of Zambia. The agreement marked a significant milestone in Dangote’s quest to establish a cement plant in that country. The value of the investment is estimated at $400 million (N60 billion).
The Investment Promotion and Protection Agreement is a requirement for all major investors in Zambia, which offers them additional incentives and safeguards their investments in case of changes in legislation.
According to Dangote, the proposed cement plant in Zambia with an installed capacity of 1.5 million metric tonnes per annum, will be up and running 27 months from February/March 2011. He said DIL’s choice of Zambia for this multi-million dollar investment is quite strategic, noting that the World Bank had in 2010 named Zambia as one of the world’s fastest economically reforming countries.
Zambia, he recalled, is also rated as one of the most highly urbanised countries in sub-Saharan Africa with 44 percent of the population concentrated in a few urban areas.
He said this high level of urbanisation posed a challenge to the government in terms of how to provide adequate infrastructure for the people.
Citing a report by the McKinsey Global Institute issued in June 2010, which stated that Africa would require at least $46 billion annual spending to meet infrastructural needs, Dangote said it had become quite obvious that African governments alone cannot meet the demand.
Source – Nigerian Compas