Africa's richest man, Aliko Dangote, has highlighted the high cost of doing business in Nigeria, attributing it to unstable electricity supply and inconsistent government policies.
Speaking during a visit by Zambian Minister of Energy, Makozo Chikote, at the Dangote Refinery in Lekki, Lagos, Dangote explained that businesses in developed countries operate at 30% lower costs than those in Nigeria due to reliable electricity infrastructure.
Power Supply: The Major Business Challenge
Dangote emphasized that power supply is crucial for industrial growth, stating that one of the main reasons businesses struggle in Nigeria is the lack of stable electricity.
"If there's no power, there won't be growth. Anything I'm going to do abroad will cost me maybe 30% cheaper than here because abroad is plug-and-play. You just build a factory and connect to the network; that's all."
He revealed that Ethiopia hosts the most profitable Dangote Cement factory due to its stable electricity supply and fixed power rates for five years.
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High Infrastructure Costs in Nigeria
Unlike developed nations where businesses easily connect to existing infrastructure, Dangote noted that in Nigeria, companies must invest heavily in their own electricity generation. He pointed out that Dangote Group spends significantly on power for its refinery and other factories, a cost that businesses abroad do not incur.
Inconsistent Government Policies: A Barrier to Industrialisation
Dangote also blamed policy inconsistencies as a major obstacle to industrialisation in Nigeria.
"One of the problems of industrialisation is inconsistencies in government policies, where, just like a footballer, you're about to score, and the government moves the goalpost. Then, you have to start all over again, facing new challenges."
He stressed the need for policy stability, arguing that the government is a major beneficiary of industrialisation through tax revenues.
Heavy Tax Burden on Businesses
Dangote detailed the multiple tax layers businesses face in Nigeria:
30% corporate tax
7.5% value-added tax (VAT)
2% education tax
1% health tax
10% withholding tax on shareholder earnings
"For every N1 we generate in our cement business, 52 kobo goes to the government in various taxes. When you add state and local government levies, it becomes even more challenging."
The Need for a Business-Friendly Environment
Dangote warned that if businesses shut down, the government also suffers, urging policymakers to prioritise industrialisation for national development.
He concluded that Nigeria's economic growth depends on solving power supply issues, reducing business costs, and ensuring consistent policies that support industrial expansion.
