Afrixa’s wealthiest man Aliko Dangote says he has never defaulted on a bank loan in 47 years of doing business, recalling that he continued meeting his obligations even when interest rates reached as high as 44 per cent during the development of the Obajana Cement plant.
Speaking in a wide-ranging interview with ARISE News Anchor Ojy Okpe, Dangote cited his borrowing record while discussing the enormous financing challenges facing entrepreneurs seeking to build major industrial projects in Nigeria.
“In my 47 years, I’ve never defaulted on any loan,” Dangote said.
He added that he has never been involved in litigation with a bank over a failure to repay money borrowed for his businesses.
“No bank has ever taken me to court,” he said.
Dangote contrasted that record with the sometimes extreme cost of borrowing he encountered while expanding his businesses from trading into large-scale manufacturing.
He recalled that during the development of Obajana Cement, interest rates climbed to levels that would ordinarily make major industrial investment extremely difficult.
“When we were building Obajana, we paid 44% interest,” Dangote said.
The billionaire used his experience to illustrate a wider argument about the difficulty of industrialising an economy where businesses must finance long-term manufacturing investments at exceptionally high borrowing costs.
“It’s very difficult to industrialise with interest rates at 30%,” he said.
Large industrial projects such as cement factories, refineries and fertiliser plants typically require substantial upfront capital and years before investors can fully recover their investment, making the cost and availability of long-term finance critical to their viability.
Dangote’s industrial expansion has required significant borrowing over the decades, culminating in the financing of the refinery and fertiliser projects.
In the same ARISE News interview, he revealed that he pledged all his assets as collateral and provided a personal guarantee to secure the initial $3.7 billion financing for those projects.
Dangote said his record of meeting financial obligations has been maintained despite taking risks on projects whose eventual success was far from guaranteed at the time capital was committed.
His remarks came as he argued that Africa needs substantially greater domestic industrial investment if it is to create jobs and reduce its reliance on imported goods.
But Dangote said high interest rates were only one part of the challenge, pointing also to inconsistent policies and inadequate protection for domestic manufacturers.
He warned that entrepreneurs capable of investing in major projects were increasingly reluctant to do so.
“Most of these entrepreneurs, they are actually scared to death,” he said.
Dangote argued that governments seeking investment, employment and tax revenue must create conditions in which domestic producers can compete and survive.
“If a government wants to create jobs, they want to create economic activities, they want to collect tax, they also have to give something in,” he said.
“And the only thing that they will give in is to protect the domestic industry.”
Demola Ojo
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