According to Forbes 2023 World’s Billionaires list, Aliko Dangote is the ninth richest manufacturing billionaire in the world, with a net worth of $13.5 billion. The Nigerian tycoon has occupied the status of Africa’s wealthiest man on record for over a decade. The question to ask then is why and how Aliko Dangote managed to accumulate so much wealth?
First, Dangote is the founder and chairman of the Dangote Group, one of the largest private sector employers in Nigeria and the most valuable conglomerate in West Africa. The Dangote Group has interests in a wide range of industries, including cement, sugar, flour, salt, and other sectors.
Second, the manufacturing industry is a very capital-intensive industry. And business owners who venture into this industry and manage to run a successful enterprise become extremely wealthy. This was the case with the captains of industry in America who were unjustly and derogatorily nicknamed “the robber barons.”
As was aforementioned, the manufacturing sector is a capital-intensive industry for a number of reasons. First, it is a sector that has a high barrier to entry. Capital-intensive industries require a large upfront investment in machinery and equipment, which makes it difficult for new entrants to compete. This gives existing businesses a significant advantage and allows them to charge higher prices for their goods and services. Second, Capital-intensive industries often benefit from economies of scale, which means that the cost of producing each unit of output decreases as the scale of production increases. This gives larger businesses a cost advantage over smaller businesses. And third, the manufacturing sector has a strong market power. This is because capital-intensive industries often have a small number of large players that dominate the market. This gives these businesses significant market power, which they can use to influence prices and maintain their profits.
In addition to these factors, business owners in capital-intensive industries are also wealthy because they typically have a high level of expertise and experience. Capital-intensive industries are often complex and require a deep understanding of the underlying technology and processes. Business owners in these industries must also be able to manage large and complex operations. Aliko Dangote has a high level of expertise in the manufacturing industry. That is why his conglomerate is, in fact, a corporation of diversified manufacturing ventures, and was able to accumulate so much wealth.
Lastly, let us not forget that Dangote is a very shrewd businessman who has been able to identify and capitalize on opportunities in the African market. Dangote Cement is the largest cement producer in Africa and has a significant market share in many African countries. The company's earnings have been growing steadily in recent years, which has helped to increase Dangote's net worth. He has also been able to build a strong network of relationships with government officials and other business leaders. Thus, shall we be surprised that he is the ninth wealthiest billionaire in the manufacturing sector?