Hats off to Nigerian magnate Aliko Dangote. Amid global panic about China's imploding stock market and the plunge in the price of oil, Nigeria's top export, Dangote chooses to announce a US$4.3 billion joint venture with China's Sinoma to build cement plants in eight African countries. Dangote always knows exactly what the markets are doing, so his timing is likely to have been deliberate. Like China, Dangote is playing the long game. Neither side wants to put their plans on hold because of the current market crisis.
Confidently predicting that all the new factories will be operating
within two and half years with a production of capacity of 70 million
tonnes a year, Dangote says he will add a further 30 mn. tonnes by
2020. Dangote wants to challenge France's
Lafarge cement conglomerate
for market supremacy within and beyond Africa.
Although Nigeria's growth rate has slumped to 2.4%, and Beijing's
economic restructuring is hitting turbulent waters, there is a logic to
Dangote's big China deal. Cement is a bet on the dynamism of Africa's
internal market: that regardless of commodity and share price
roller-coasters, demand from the world's fastest growing population for
houses, offices and factories is set to outstrip supply for years to
come. It also looks like the next stage in China-Africa relations –
joint-ventures for manufacturing companies that will play a leading
role in modernising African economies and weaning the continent from
its dependence on primary commodities.