Aliko Dangote21:24
I think I'm really very delighted that I'm talking to African audience, and before I go on to reading of my speech, today we have what you call Dangote Vision 2030. Dangote Vision 2030 is in the next four years we have $46 billion to invest across Africa, which we are doing quite a lot. We started going to other countries. By the grace of God, this year either September or October, we are going to launch another 700,000 barrels per day refinery in East Africa in Lamu. So let me go on to reading my speech first.
Your excellencies, distinguished ladies and gentlemen, good morning. I'm highly honored to be invited by His Excellency the President of the Republic of the Gambia to participate at this distinguished gathering of African policy makers and development partners. Distinguished guests, permit me to begin with a proposition that may sound obvious yet remains insufficiently internalized in our development discourse. No country in modern economic history has achieved a high income status without industrialization. Not one. Every economy that has escaped poverty at scale, whether Britain, Germany, the United States, Japan, South Korea, China, Vietnam, or more recently Bangladesh, did so through a deliberate process of industrial transformation. Industrialization has historically been the bridge between abundance of natural resources and abundance of prosperity. It converts labor into productive employment. It transforms commodities into value added products. It deepens domestic capital formation. It broadens the tax base. It fosters innovation, and ultimately it creates the middle class that underpins social stability and political resilience. Africa's share of global merchandise exports has actually stagnated around 3%, and more than 70% of our exports remain primary commodities and raw materials. The continent loses about $40 to $50 billion annually by exporting raw commodities that are processed elsewhere, you know, before being sold back to African consumers at very exorbitant higher prices. These statistics have actually been our signpost for decades. It explains why many African economies continue to experience cycles of growth without structural transformation. Growth derived solely from commodities can raise incomes temporarily, but industrialization creates wealth permanently. It is therefore my conviction that industrialization should not be viewed as one component of Africa's development strategy. It should be recognized as the central organizing framework around which macroeconomic policies, trade arrangements, infrastructure investment, educational system and financial markets are aligned.
Industrialization matters more today than ever before. The global economy is entering a period characterized by fragmentation, heightened geopolitical tensions, increasing competition for productive capacity. Global supply chains are being redesigned. Countries are seeking resilience and regional diversification, and the energy transition is creating unprecedented demand for critical minerals. Food security concerns are altering agricultural trade patterns, and digital technologies are reshaping manufacturing processes. These developments are creating new risks for Africa, but also perhaps the greatest industrial opportunity the continent has ever seen in half a century. Africa's population is projected to be about 2.5 billion people by 2050, representing one quarter of humanity. By then, Africa will have the largest workforce in the world. If this labor force remains largely informal and underemployed, demographic expansion could become a source of instability. However, if absorbed into manufacturing, agro-processing, logistics, mining, beneficiation, and industrial services, it could become the most powerful engine of global growth. The choice before us is therefore not whether Africa industrializes, but whether Africa industrializes deliberately and collectively or remains a supplier of raw materials in a rapidly changing world economy.
Industrialization is perhaps the most effective anti-poverty program ever invented, as manufacturing jobs typically exhibit productivity levels three to five times higher than traditional agriculture. Studies suggest that a manufacturing job creates between five to six additional jobs in supporting sectors including transportation, construction, finance, retail, and professional services. Africa needs approximately 20 million new jobs annually merely to accommodate the new entrants into the labor market. Public employment cannot provide these opportunities. Neither would agriculture alone provide them, nor extractive industries. Only industrialization possesses the scale, productivity, and multiplier effects required to absorb Africa's expanding workforce. And I've seen it as a Nigerian. I was actually telling the honorable minister of foreign affairs that we need to create jobs. The growth of population in Africa is a lot. In my own country, Nigeria, most people don't have an idea that every year we have 8.7 million babies. So you can see that we need to provide a lot for our future generations. The experiences of East Asia remain instructive. Between 1965 and 1990, manufacturing employment in the Republic of South Korea increased nearly fivefold. China's industrial expansion lifted more than 800 million out of poverty over four decades. Vietnam increased manufacturing exports from approximately $5 billion in 2000 to more than $300 billion today. As a matter of fact, in the year 2000, it was the year that I first visited Vietnam. I had the opportunity to go with my president, President Obasanjo, and I can tell you for nothing, when we went there I couldn't sleep that night because mosquitoes were busy harassing me. But you can see how they have actually transformed. So nothing is impossible. We should not look at ourselves as if we cannot make it. We can.
So these transformations were not accidental. They resulted from deliberate industrial policies, export orientation, infrastructural investment, and integration into larger regional and global markets. National industrialization strategies alone are insufficient. Industrialization requires scale, and scale requires markets, and markets require integration. No African country by itself possesses sufficient market size to support efficient production across a broad range of industries. The combined GDP of all countries in West Africa alone is smaller than that of several individual emerging economies. More than 20 African countries have populations below 20 million people, and small fragmented markets discourage investments. They increase production costs, they limit specialization, and reduce competitiveness. Industrialization without integration risks creating isolated industrial enclaves, and integration without industrialization risks merely expanding markets for imported products. Africa requires both industrialization and integration; they must proceed simultaneously. The establishment of the African Continental Free Trade Area, AFCFTA, represents one of the most consequential economic initiatives undertaken since independence. With a combined GDP exceeding $3.5 trillion and a population of approximately 1.5 billion people, AFCFTA has the potential to become the world's largest free trade area. Studies suggest that effective implementation could increase intra-African exports by more than 80% by 2035. We are talking about maybe in 9 years' time. The World Bank estimates that AFCFTA could raise real incomes by approximately 7%, lifting nearly 50 million Africans out of extreme poverty. But these benefits will not materialize automatically. Trade agreements do not create industries. Industries create trade. If African countries continue producing largely unprocessed commodities, AFCFTA may simply facilitate the movement of imported goods through different ports and corridors. The objective must therefore be to utilize AFCFTA as an industrialization platform.
Regional value chains should be developed around sectors where Africa possesses clear comparative advantage. This includes agriculture and food processing, pharmaceuticals, fertilizers, textiles and garments, steel and metals, automotive and components, cement and construction materials, battery minerals and clean energy technologies. Africa is already producing examples that demonstrate what industrialization can achieve. The Dangote Group itself offers one illustration. From a trading company established several decades ago, it has evolved into Africa's largest industrial conglomerate. Its investments span cement, fertilizers, petrochemicals, sugar, seasoning, salt, agriculture, and energy. In Dangote alone, we actually run 18,000 trucks, and this is just to move 60% of our own goods. The refinery and petrochemical complex in Lekki, Lagos, represents one of the largest single industrial investments ever undertaken on the African continent at a cost of $20 billion. Its significance extends beyond refining of crude. It demonstrates that African capital, African entrepreneurship, and African engineering capabilities can execute global projects at a globally competitive scale. Now let me also explain to you: the EPC contractor to this huge complex is not a foreign company. It is Dangote Industries ourselves that we built it from scratch to the end.
The refinery actually has the potential to save billions of dollars previously spent importing refined petroleum products, estimated at 40% of total foreign exchange inflows, strengthen regional energy security, and support downstream manufacturing with a projected total of 1.4 million barrels per day capacity by 2029 first quarter. Similarly, the fertilizer business contributes to agricultural productivity enhancement across several African countries, with an expansion projection of 12 million metric tons by 2029. Today we have 9 million tons under construction, and we have 3 million tons that we have been producing for the last 3 years, and we are opening up mines in potash and phosphate in Congo-Brazzaville, and we are doing DAP, and we are doing a lot, working with banks to make sure that financing is available for countries in Africa. It means that farmers will be getting fertilizers when it is due or when they are supposed to get those things. So it means that agriculture will actually be propelled to the next level by the grace of God by 2030. The cement business has substantially reduced dependence on imports while stimulating construction and infrastructural development. With expansion of our capacity, we have just about 55 million tons today in operation. By this year we will be at about 62. By 2030 we will be at 100 million tons of capacity of cement. These experiences illustrate an important lesson: that industrialization requires patient capital. It requires long-term vision. It requires supportive public policies including state protection against foreign dumping, substandard products, and competitive practices. And above all, it requires confidence that Africa can produce, not merely consume, but even the excess it can actually export to the rest of the world. When you look at West Africa alone, which is ECOWAS, ECOWAS imports 32 million tons of cement, and we are aggressively putting up cement plants in Nigeria to make sure we address those issues because there are very few countries in West Africa out of the 15; I think only about four countries have sufficient limestone to produce cement, and there's no way you can develop without cement because of infrastructure. So at this juncture, let me pause and emphatically reiterate that industrialization is capital intensive.
Africa's annual infrastructural gap remains estimated at between $100 billion and $170 billion. Long-term domestic capital markets remain shallow. Pension assets are underutilized. Project preparation capacity remains very weak. Commercial lending tenors are often inadequate, and development finance institutions are trailing behind. Multilateral financial institutions such as the IMF, the World Bank, the IFC, the African Development Bank, and regional development banks can help de-risk industrial investment, guarantee domestic capital mobilization vehicles, evolve blended finance instruments, create special industrial financing facilities, and become a pivotal industrialization financing platform for Africa. African sovereign wealth funds and pension funds could scale assets towards productive investment. But most importantly, Africa must mobilize its own savings. Foreign investment is valuable, but domestic investment is indispensable. What I'm trying to say here is that when you look at pension funds in Africa, you're talking about a total of almost $600 billion. But are we really putting that $600 billion into use? I think the answer we know it's all here. It's not. And there are a lot of financial institutions that are actually not interested in seeing the development of Africa. We need to wake up and do things by ourselves. History suggests that countries which successfully industrialized relied substantially on domestic capital accumulation before attracting significant external investments. Now honorable ministers, the prime minister of Guinea-Bissau, honorable ministers, central bank governors, top government policy makers, industrialization cannot succeed without sound macroeconomic foundations.
Investors, local or foreign, require stability. Businesses require predictability. Manufacturers require competitive exchange rates, reliable energy supply, and efficient logistic systems. Specifically, let me mention key policy priorities that are fundamental for Africa's industrialization: maintaining macroeconomic stability and policy consistency; investing aggressively in energy generation, transport corridors, and digital infrastructure; harmonizing customs procedures and reducing non-tariff barriers; reforming educational systems to align skills development with industrial requirements; and strengthening institutions responsible for industrial planning and implementation. But then when you really look at it, how do we develop our continent? We are busy not implementing the AFCFTA, which is free movement of goods, services, and people. Where now, if I hold a British passport, I will move freer in Africa than an African. This must stop. It must actually stop because the issue is that if we don't allow trade among ourselves, we will remain divided, and a divided house does not stand. So please, let's have everything. Since we have all the big guys here, we should champion our continent's growth, and it is possible. We can do it. So industrial policy should not be confused with protectionism. Successful industrial policy identifies strategic sectors, addresses market failures, coordinates investment, and incentivizes competitiveness. Government should not attempt to replace entrepreneurs. They should create conditions under which entrepreneurs can flourish. Industrialization is not solely a government project, nor can it be delegated entirely to the markets. It requires a compact between government, businesses, financiers, and development partners. Governments provide enabling conditions. Private investors provide capital, innovation, and execution capacity. Diplomacy.