Africa’s richest man, Aliko Dangote, has been criticised by some over his suggestion that Nigeria sells off some of its assets to build up its reserves and kickstart the flailing economy.
In an interview published in a national newspaper on Tuesday, he tried to clarify some of what he considers to be misconceptions about his position.
Below are the top quotes from the interview:
- Dangote was emphatic that he does not have his eyes on acquiring any of the assets, especially the one which most critics are suspecting he covets – the NLNG. He said his suggestion was because he is a true Nigerian who wants the issues around the economy to be sorted:
“Why did I suggest that we should sell some of the assets? I know the touchy one is the NLNG. I want to make it categorically clear that even if the government is selling NLNG on credit, I am not interested in buying. I don’t have any interest in NLNG and I will not buy it. It is not a business that I want to invest in.”
- But why wouldn’t Dangote want to invest in what everyone describes as the “lucrative” and “performing” NLNG? Here is what he said:
“It is a mature business; that is what people don’t understand. Right now, the business has already plateaued and is sliding. Even the earnings, gas prices are coming down. You see, we should have invested heavily in all these Brass LNG, Olokola LNG, etc, when former President Olusegun Obasanjo started work on the projects, but we missed the opportunity. Today, you have massive LNG projects that have been done by Qatar, Australia and the United States is also exporting. But right now, all the gas that we have is even in the ground. Even Mozambique has a massive amount of gas and also Tanzania, and they are nearer to the markets than we are. So, if somebody is even going to invest in LNG, he would go to those areas and invest there and not here in Nigeria, because the investment here is daunting.”
- And he says he is not even recommending for the FG to sell its entire stake in the NLNG:
“Even if we must sell, it doesn’t have to be 100 per cent of our interest in NLNG. Even if NLNG was bringing in $1.5 billion into the federal government’s coffers, once the government reduces its stake in the company and it is run more professionally, Nigeria would generate more funds from it.
“So we are not advising government to just sell its assets. For example, we have the joint ventures where government owns an average of 57 per cent stake in the oil blocs and what we are saying is that government should go below 49 per cent. When they go below 49 per cent, they would be able to raise $5 billion to $8 billion. And if they go below 49 per cent, they can go and borrow money because with that they can borrow money cheaper. Today, to go and borrow money abroad, for the likes of Shell, it would not exceed two and a half per cent. But today, Nigeria cannot borrow money at a single-digit interest rate.”
- According to Dangote, it is hard to even borrow money unless those you seek funds from see that you are doing all it takes from your end.
“People are just saying it is better to go and borrow, but I don’t know where they are coming from. You see, with borrowing, if I have issues with my business today, the bankers who would lend me the money would want to see me doing something first to see how the business can survive. There would be conditionalities. But if you are not shedding weight, how do you expect somebody to help you with funding?
“If we can get the loan, fine. But we have to get something, whether it is through loans, debts or even the sale of assets. There are lots of friendly countries like Qatar, Saudi Arabia and others that have the capacity to give us money. But they would hasten to give us money when they see that we are doing something.
“When you have assets, you can raise money on your own without doing anything. You see, it is easier for me to go and tell somebody that my flour or sugar business is on sale and that I am negotiating their sale, and that the person should give me money so that I can bridge a funding gap. What this means is that government may not have to sell the assets out of desperation. But at the same time, you must know that when you need money, that is when people are not willing to lend you money.”
- Dangote does not believe that the current exchange rate is a true reflection for the the value of the Naira:
“Once your reserves are low, the banks, entrepreneurs, including external forces, would definitely attack your currency. They would speculate on your currency. We all know that the exchange rate of almost N500 to the dollar is not a true reflection of the value of the currency – the naira cannot be almost N500 to the dollar! But you see, if this thing is not handled properly, it can get out of hand. It can get to N600 to the dollar, or even N700 to the dollar.”