How FX challenges made me quit flour, textile businesses — Dangote

By Damilare Adeleye

The President/Chief Executive of the Dangote Group, Aliko Dangote, has attributed his decision to exit the flour and textile industries to persistent foreign exchange (FX) challenges.

Dangote spoke during an interview with Nicolai Tangen, the Chief Executive Officer (CEO) of Norges Bank Investment Management, which was posted on YouTube on Wednesday.

“Yes, I exited those [flour and textile] businesses because of the foreign exchange challenges. But today, we are very strong in terms of exports,” he said.

The billionaire industrialist disclosed that a core part of the company’s new value proposition is a commitment to paying dividends in dollars across key sectors, including cement, refining, petrochemicals, and fertilizer.

“We guarantee to pay you dividends in dollars because we are heavily involved in exports. Eighty percent of our revenue will be in dollars; that is why we are saying you have a choice.”

“For local investors, we can pay in naira if you prefer. But if you want to de-risk, because most foreign investors find it difficult to remit money once they receive dividends, we have addressed that issue,” Dangote stated.

When asked how he selects sectors for investment, the Chairman explained that his business strategy is driven by local demand and a desire to reduce Nigeria’s dependence on imports.

“We practice what you call backward integration. We produce what we need, and we are now producing items that a person must use every single morning when they wake up,” he said.

The billionaire also revealed that he sold his properties in the United States and the United Kingdom to focus entirely on building his businesses in Nigeria.

“When I decided to enter the industrial sector, I sold all my properties in the US, I had two big mansions there and I had a house in the UK. I wanted to stay in Nigeria and concentrate fully.”

“When you own a holiday home, you have to create time to use that property. Now, my life is very simple. Wherever I go, I stay in hotels. I pay, and when I leave, I don’t have to worry about anyone calling me to say a pipe has burst or something is wrong,” Dangote added.