Why is Aliko Dangote so Successful?

Aliko Dangote has been an extremely successful entrepreneur in his numerous business ventures and was named Africa’s richest man for the eleventh time in 2022, with an estimated net worth of $13.9 billion, up from $12.1 billion last year. Dangote Group, the commercial enterprise he started over three decades ago, is one of Nigeria’s largest private-sector employers and the most valuable company in West Africa. 

Aliko Dangote was born in Kano State, Nigeria, to a business family in 1957. His maternal grandfather was one of Kano State’s wealthiest persons, whom he credits with establishing a business mindset in him from a young age. Sanusi Dantata, his grandpa, acquired a fortune as a rice and oats trader.

Dangote was a burgeoning entrepreneur at the age of eight. He would buy candy and then sell it for a profit with his allowance.

“When you’re raised by an entrepreneurial parent or grandparent, you pick that aspiration”, he said in an interview with Forbes in 2015. “It makes you be much more aggressive- to think anything is possible”, he added.

Here are five reasons Aliko Dangote is so successful.

He is Can Spot Opportunities 

Dangote persuaded his uncle to lend him money to start a business after graduating from college in 1977. He acquired consumer goods from overseas vendors at wholesale prices thanks to the loan funds. Rice from Thailand and sugar from Brazil were two of his key imports. He subsequently resold those things in tiny quantities to his village’s residents at a profit.

The business was rapidly profitable and turned into a cash cow. Dangote claimed in an interview with Forbes that on his finest days, he made a daily net profit of $10,000. As a result, he was able to repay his uncle in just three months.

In 2014, Nigeria’s state-owned refineries were generally ineffective, producing only a fraction of their capacity, making the continent’s greatest oil producer the continent’s top importer of refined oil products. Dangote stepped in to make a difference in the country’s oil landscape with his refinery project. 

The plant was expected to process about 500,000 barrels of petroleum per day once completed, accounting for almost a quarter of the country’s entire crude production. 

He invested in what he knew 

The business magnate revealed in an interview with Bloomberg that knowing every business he invested in and putting in extra effort to help them grow led to the success he is known for today.

“I think the most important one, number one if you are going into any business, you must understand the business from A to Z. You must know that business; you shouldn’t just invest because somebody says you know there’s money in cement then you go and jump into cement.

You need to understand the business in and out, and that’s the difference with me. I know my business in and out. You can wake me up anytime and ask me about fertilizer, anything that we are doing.”

He has diverse businesses

Dangote’s success can be attributed to his ability to diversify his investments. The Dangote Group has expanded its business beyond cement, sugar, and flour to include real estate, telecommunications, steel, oil, and gas.

Three of his manufacturing subsidiaries, Dangote Sugar Refinery PLC, National Salt Company of Nigeria PLC, and Dangote Cement PLC, are now publicly traded firms.

Unlike many affluent Nigerians who built their fortunes in oil, Dangote chose a different path at first, but he has now returned to the oil and gas industry. Dangote is building a large oil refinery in Lagos, which is expected to commence operations in 2022, in an effort to put some of his financial stockpiles to work. It may dramatically reduce Nigeria’s dependency on international oil and gas sources and eliminate the $7 billion in annual fuel imports if successful.

Nigeria’s $15 billion refineries will be the country’s greatest industrial undertaking ever, producing 650,000 barrels of oil per day.

He is Charitable 

Aliko Dangote is a well-known philanthropist who established his own foundation in 1994. The Aliko Dangote Foundation (ADF) is committed to improving people’s lives in Africa through sponsoring initiatives in health, education, and economic development. The foundation is now Sub-Saharan Africa’s largest private foundation.

In one of it’s greatest achievements, the Aliko Dangote Foundation, began collaborating with the Bill and Melinda Gates Foundation in 2013 to eradicate polio and improve routine vaccines across the country. In August 2020, the entire African continent, of which Nigeria was the last to be certified free of wild polio, celebrated its official accreditation.

He crushes his competitors

Dangote is notorious for using a variety of strategies against his competitors, including price crashing. He’s made a fortune by slashing the pricing of major goods, leaving his competitors in a tough position. For him, this method results in a near-monopoly in essential commodities.

In 2021, Dangote Group suggested a clause in the Petroleum Industry Bill (PIB) that will prohibit companies without refining licenses from importing oil, in order to gain an advantage over other significant competitors in Nigeria’s lucrative oil sector. 

READ MORE: Africa’s Richest Person Aliko Dangote on Entrepreneurial Spirit