The audacity of commitment: Aliko Dangote in the cusp of history

They say seeing is believing. I had not seen some of the evidence, but I believed. I believed enough that I started an Executive MBA class a few weeks ago. I was facilitating it, asking the students to load up the excuses of the naysayers, such as waivers from the government gave them an advantage and officials of the government beat down their competitors. Whether these be true, exaggerated or contrived was not key to the exercise. I then led them in pointing out business leaders perceived to have been even more favoured in decades past. The question that followed was how many of the equally favoured or better advantaged have had an impact of his scale in creating jobs, contributing tax flows and propelling a prosperity paradox, as Clayton Christensen would call the art of creating new markets and erecting value chains where none existed.

The class found the treatment of the Dangote case compelling.

Show me Mai Deribe’s garage of dozens of decaying status cars with his influence and access to the powerful in those days, I told the class, and I will show you why Aliko deserves to be seen as a national treasure.

But at the time of that class, I based my views on old evidence.

Then an old friend I teased as being almost marooned abroad came visiting and wanted his tourism experience to include a visit to the Dangote refinery. He managed to talk me into coming along as part of my mea culpa for not making enough effort to visit him on my trips to New York.

The visit to Ibeju Lekki left me stunned and gasping for breath.

The audacity of the vision and the stunning courage for commitment bordering on positive recklessness, where Eagles dare, could be seen on display any which way you looked.

I felt like recalling my class and telling them I believed from seeing cement; now that I have seen what I could not have imagined, I want to step up many notches in my position in the conversation. But I also needed to see Aliko Dangote to review a conversation we had nearly two decades earlier. I had written an op-ed piece in which I suggested Nigeria could claim its promise if it found 200 entrepreneurs like Aliko. As it turned out, I ran into Aliko at the airport the day that the write-up appeared, and we talked about the views I had expressed in that news feature writing.

After visiting the refinery, I have become convinced that ten Alikos could do for starters. Two hundred Alikos would be super great, but just ten would turn the fortunes of the continent around.

A production facility several times the size of Victoria Island is audacious anywhere, any day. I was not staggered by the scale, scope and work that made swampland a marvel of modern technology. It was not that which amazed me. I had followed the journey of the Anbanis and Reliance Industries in India, not to be overawed by projects of scale. It was my insights into how Nigeria went into de-industrialisation that made contemplating what Aliko had accomplished so awe-inspiring.

Read also: Agbakoba urges amicable resolution of Dangote Refinery/NMDPRA rift in Nigeria’s interest

Four main things led to the collapse of manufacturing in Nigeria, which jumped off the starting block and surged forward just as self-government got underway in the late 1950s.

The first was the failure of public authorities to plan for power. NEPA was the major undoing of most manufacturers that became uncompetitive, beginning with textiles, in which export competitiveness had arrived by 1960, as Irene Sun reports in her book, The Next Factory of the World.

Inconsistency in government policy was a close second in the demise of manufacturing. From the banning and unbanning of the importation of malted barley for the brewing industry to the backward integration of the flour milling industry that pushed for local growing of wheat or adoption of alternative inputs, only for policy to switch as the Cornvittas were entering the market. One is regaled with amazing tales of policy changes that wiped out firms. Add to this the disastrous management of trade policy as policymakers came to be ruled more by their egos and power than national interest, as Singapore’s Lee Kuan Yew pointed out and Rufai Oseni highlighted in a recent interview with me.

Equally devastating for manufacturing was what I called the predatory acts of public officials in my 3E framework, which first appeared in my 1998 book, Managing Uncertainty.

Then there was the double whammy of the philosophy of government occupying the commanding heights of the economy as well as favouring import substitution industrialisation, which left anchor industries like steel, oil and gas, and paper in government hands through parastatals riddled with goal displacement. NNPC was one of them. I recall that while doing research for the book Managing Uncertainty, I interviewed the immediate past GMD of NNPC, Dr Tom John. When I suggested privatising NNPC, he feigned surprise, saying he thought NNPC was long privatised, then he laughed and added that those who own NNPC did not pay for it. Not much has changed since that tongue-in-cheek remark by Dr Thomas Asuquo John in 1995.

I was reflecting on these things when Alhaji Aliko Dangote calmly told me back then that a trip to Brazil had pointed him to the path of large-scale manufacturing. I thought it was an exhibition of extraordinary courage to be so bullish on manufacturing. Evidently, his strategy was to generate his own power at scale, which many multinationals would not get approval from home to do in risky Nigeria. His bet worked, and that enabled him to restructure the cement industry.

If he could overcome the power issue, how would he deal with the predatory acts of public officials? He is obviously still battling with it.

Every time I hear NNPC people say something unsavoury about the Dangote refinery and their products, I shudder at the shamelessness of public officials in Nigeria.

In normal countries the public officials would defend and promote such a venture with a passion reserved for safeguarding the family silver, but here it is NNPC people who have almost bankrupted the Treasury ‘repairing’ refineries I have repeatedly said are broken beyond mendable elastic limits and kept refinery staff on salaries doing nothing that are running down a USD 20bn investment in their own country.

Who does that?

They attack product quality, yet Dangote is exporting into the US market, which is the most quality-sensitive market that I know. Those who are the ultimate champions of monopoly are now accusing Dangote of monopoly intentions.

This is beyond a lack of patriotism.

They should go and study how the old Ministry of International Trade and Industry (MITI) worked with Japanese companies in the 1960s and created the idea of Japan Inc. It was not just the Kereitsus that got support from the government, but the chaebols did in South Korea.

The foregoing is not to suggest that monopoly concerns or quality issues should be swept under the table. The mindset of partnership for good is clearly different from roadblocks by illegal toll collectors. The entitlement mentality of many in strategic policy positions in our very opaque oil sector has stunted its growth. Now is the time to clean houses in that sector.

If we are going to create the millions of jobs needed for Nigeria to develop, the public service needs new thinking. Do they not feel disturbed in their spirit seeing the transformation of the Middle East?

It is clear that Aliko is where he is because of uncommon audacity of commitment, leadership gifting and capacity for humongous visioning. There are many who will work away, harassed as he is by people who should be the cheerleaders.

The new thinking is particularly important because entrepreneurs are imperatives of progress in a market economy, as I have argued in the book Business Angel As A Missionary: Reflections of an Economic Growth Activist. Not doing so may take us down the path of Argentina, which in the 1920s was a peer of the US but today has performance numbers poles apart.

What commitment can do is truly incredible. I remember being around when, in the mid-1990s, Harvard Business School strategy faculty were sharply divided between flexibility and commitment as strategic thrusts past the uncertainties in the environment. Pankaj Ghemawat, who had written the book Commitment and was my host at the school as I wrote the book on Competition and Strategy in Emerging Economies, used to use the conquistadores burning their boats as they arrived in Latin America as an illustration of commitment, with nowhere to run back to. I bet he would have seen Dangote’s investment in the same way he saw advancing armies blow up the bridges they had crossed so they would have no path of retreat to regroup, should the heat get to boiling.

Aliko has shown commitment that students of strategy will speak of for generations.

I am glad my friends who invited me to visit the Eleko Beach Refinery for the privilege to witness so many Nigerians creating value in concert did. This is what the country needs. I am pleased to celebrate Aliko Dangote for doing this.

Prof. Pat Utomi, political economist and pioneer teacher of entrepreneurship at LBS, wrote his first case study on the Dangote group in 1999.

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