Aliko Dangote is the richest man you've never heard of.
The 56-year old native of Kano, Nigeria is a self-made business magnate, with a net worth of more than $16 billion.
With boom times ahead for Africa, Dangote is leading the continent's headlong charge into infrastructure building and resource exploration.
A person of vision and drive, he's well suited for the unfolding boom, and all the opportunity it offers.
As the African Century moves into its second decade, Dangote is still very bullish on Africa– making – and keeping – most of his fortune there.
He is the head of one of the largest, most diversified conglomerates in Africa, Dangote Group, a privately held company with subsidiaries all over western and southern Africa. Dangote Group subsidiaries handle:
And while the Dangote Group remains privately held, there are fully four publicly traded Dangote subsidiaries that you can invest in today. They include:
- Dangote Cement Plc (NSE:DANGCEM)
- National Salt Co. Nigeria Plc (NSE:NASCON)
- Dangote Flour Mills Plc (NSE:DANGFLOU)
- Dangote Sugar Refinery Plc (NSE:DANGSUGA)
Since the Dangote Group keeps an intensely local focus, targeting local markets with needed value-added products these investment are almost 100% confined to Africa.
There's a good reason for this kind of focus: African consumer spending is rising with incomes.
The African Development Bank Group projects consumer spending across Africa to hit $678 billion by 2020, as poverty rates tumble from 48% – 20% by the same year.
From one end to the other, with the exception of automobiles, if an African needs to buy it, Dangote Group makes it, moves it, or sells it. Dangote Group products and services form the backbone of the African economic explosion, and there's no sign of that explosion letting up.
Dangote Cement is currently the biggest company in the conglomerate. It's also the biggest company on the open Nigerian Stock Exchange in Lagos, and plans are underway to offer shares on the London market. Dangote Cement has a market cap of $15 billion, and Forbespegs it as one of the Top Five listed companies in West Africa. Dangote Cement accounts for close to 80% of Dangote Group's business.
It's safe to say that, wherever in Africa there's a building going up under contract, there's at least some of Aliko Dangote's cement in the mix.
Speaking to Bloombergfrom the World Economic Forum on Africa in Cape Town, South Africa, Dangote briefly outlined his strategy of seeking returns from sub-Saharan Africa, highlighting his local focus.
He said, "you have to invest in sub-Saharan Africa. Infrastructure, industrialization… you name it. The profitability is well worth the risk."
Dangote insists that the region is one of the best in the world in terms of return on investment, and it's easy to see why.
According to Business Insiderand the World Bank, eleven of the twenty fastest-growing economies in the world are in Africa. With the sole exception of Ethiopia, all are in sub-Saharan Africa. The physical evidence of boom times ahead is undeniable.
Take the city of Luanda, for instance. It's the capital of Angola and it is seeing a surge in building as the recovery there gains steam. Many Chinese firms have moved in to help fully realize Angola's oil potential, and new developments have sprung up throughout the former Portuguese colonial city.
That's one example of a story that's playing out in a similar way all over southern Africa.
Rwanda is a country that, barely twenty years ago, was in the grip of a genocidal frenzy that killed more than one million people.
But today, with the help of Citigroup Inc (NYSE: C) and BNP Paribas (EPA:BNP), Rwanda recently floated its first ten-year U.S. dollar bond. The issue rate was a modest $400 million, but the offering was wildly oversubscribed and attracted over $3.5 billion from investors.
The bond's 6.625% coupon rate might have had something to do with it. U.S. Treasury yields like that are but a far, foggy memory, and most Western countries would have a hard time coming anywhere close.
That's as clear a signal as any that sub-Saharan Africa is delivering the goods for investors.
Admittedly, there are still many obstacles for Africa to overcome. Economic growth isn't necessarily the best indicator of prospects. There is still vast income inequality and HIV/AIDS stalks the landscape.
And yes there are, in some places, real human rights concerns.
But we're still at the beginning of the African Century.
Democracy is taking hold all over the continent. Incomes are rising, a middle class is in the ascendant. And Africans, like Dangote, are providing African solutions to African problems – and making a killing in the bargain.
Western investors would be wise to view opportunities in Africa through the lens of caution, but it's clear that there are tremendous opportunities there now for the smart money.
- African Development Bank Group:
Championing Inclusive Growth Across Africa
- Business Insider:
Fastest Growing Economies Through 2015
- Rwanda News:
Rwanda's First Bond Attracts US$3.5 Billion On Debut
Aliko Dangote Profile
Africa's Richest Man Favors Sub-Saharan Returns