Dangote speaks about investing in Edo State

CNBC Africa’s Onyi Sunday caught up with Africa’s richest man, Aliko Dangote, President of the Dangote Group, at the just concluded Edo Investment Summit in Benin City and discussed what this summit means for the State.

I think the summit went very well even though they had a short period of time inviting people and also arranging it’s a situation where they want to show that the public sector is ready to partner and do business with the private sector. You can see that the hall was filled to the brim and they invited a lot of people and majority of them really paid attention to the conference, and these are big investors. They are taking people who have $500 million and above and I think this will open up the state to job creation and it will enlighten people of the opportunities Edo State has. They are here ready to business and I think the state has a lot of advantages in terms of agriculture and agro-allied industries which I think is their own oil. If they can really focus on that and harness it they will be able to do something great.

In your speech at the event, you spoke about the need for better collaboration between the public and private sectors. How important is this and what has been the situation been from your perspective?
The relationship has been okay to a certain extent. There are a couple of different people in government. Some are pro business and others are anti-business. The ones that are against business have never really taken a good look to see the opportunity for government, because there are taxes. People in business pay taxes. Even if they have a 3-5 year tax holiday, by the time that you start paying taxes, you end up seeing that the government makes more money than the owners of the business, including the reserves of the company. We have that case in our sugar business. The government takes more money, when you take the VAT and everything into account, the government takes 42 per cent and we take 48 per cent.

It is a win win situation. Apart from that you’ll create a lot of jobs because it isn’t the duty of the government to create jobs. The government is meant to facilitate and make sure there’s an enabling environment. We the private sector are the ones that will actually take the risks. We risk our money, risk our resources, borrow more money from the banks and now go on a trajectory. If it fails we’re on our own. If it succeeds, then government comes in and shares the profits. However, the main thing isn’t only about money or profit making. Of course you have to make money, but the most important thing for us today as a nation is how do we create jobs.

Based on my own estimations Nigeria should be creating something like about 5 million jobs every year for us to become prosperous. The only way we can create this high number of jobs is to go and concentrate on agriculture. In my speech I said, “how many barrels of oil do you need to make up for one tonne palm oil.” A tonne of palm oil can actually buy almost 8 barrels of oil and 8 barrels of oil is more difficult to get than palmoil because we have the land, we have the water, our climate is excellent, so that’s what going on.

What do you think of the calls for restructuring and how significant are investment summits like this one to states and their development?
When you look at things as they exist today, majority of the people who call for restructuring don’t understand what restructuring is all about. And majority of the states in Nigeria are not viable. You have to run government like a business. You cannot continue to just keep running government in deficit when most states are not able to pay salaries. We have an income of N3 billion and then you have salaries and other expenses without even projects. So it means that even if you ignore capital projects and take care of only recurrent, you will always be N1 billion short.

If you run this for 5-10 years, where in the hell are you going to get the money to pay off that debt which you are creating? To do well, states don’t need to wait for restructuring. A state like Edo should move on and concentrate on agriculture, bring prosperity to your people better than oil can. With oil you don’t get the revenue, but with agriculture, the prosperity starts from the state and then it spreads to the rest of the country. This is what I think they should do. Edo can mobilise and the governor is capable. He is one of the best governors that we have in Nigeria.