Aliko Dangote-Africa’s Richest Man Could Be Worth $100 Billion By 2020

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Will Aliko Dangote end up as the world’s richest man soon? It may seem unthinkable that a Nigerian is going to become the world’s richest man, but there are very strong indications that Dangote may in the next few years end up as the world’s richest man.

Analysis by Moneyissues.ng shows that Dangote could easily become the world’s richest in the next six years going by the massive investments he is making in the real sectors of the African economy which are all enjoying a fast paced above global average growth rates.

Based on Forbes ranking of the world’s richest, the richest person in the world currently is Bill Gates with a total networth of $77.3 billion. Dangote is ranked 24 with a total networth of $24.2 billion.

Besides, Dangote being ranked 23 steps lower than Bill Gates, for Dangote to leap frog Bill Gates, to become the world’s richest man, he has to more than triple his current networth and also hope that the 23 people standing between him and number 1  do not also triple their wealth.

Our analysis at Moneyissues.ng shows that it is not impossible for Dangote to grow his wealth at a far faster pace than all the other wealthy people ranking above him within the next five years. Dangote has the advantage of living in the least developed part of the world with significant Greenfield investment opportunities which Dangote has proven to be an expert at taking advantage of.

Dangote built his fortune by investing in the under developed sectors that has been driving the growth of Nigeria’s economy and has made a fortune from flour, salt, sugar and cement. These sectors have also enjoyed some level of protection from the Nigerian government and policy and non-policy support to entrepreneurs playing in the sector.

Dangote wealth has grown in leaps in the last few years. The first time Dangote was ranked on the Forbes rich list was in March 2008 with a total networth of $3.3 billion. That year, Dangote was ranked number 334 on the world’s list of billionaires. His ranking dropped to 463 in 2010 with a networth of $2.10 billion. However, since 2010, Dangote has been moving up the ranking steadily.  Dangote’s ranking on the World’s rich list moved to 51 in March 2011 with a networth of $13.8 billion and has almost doubled since then to its current $24.2 billion.

The astronomical growth in his wealth has been fueled by the listing of Dangote Cement on the Nigerian Stock Exchange (NSE). At the time of listing, Dangote Cement was valued at $14 billion. This value has since almost doubled.

Dangote Cement listed 15.5 billion shares at N135 per share. The price as at May 2, 2014 is N225 per share, which puts the value of Dangote  Cement at N3.49 trillion or $21.5 billion based on  current exchange rates of Naira to US Dollar.

Dangote Cement has expanded its business at a very fast pace since its listing which is driving up its value.  The company is setting up cement plants and import terminals around Africa including in Ethiopia, Ghana, Ivory Coast, Senegal and Zambia, as well as South Africa. The target is to produce 46 million tonnes of cement a year on the continent by 2015, 30 million of it in Nigeria.

Dangote Cement which currently controls about 70% of the Nigerian cement market is on course to become the biggest cement producer on the continent by 2016.

What this means  is that Dangote Cement could easily double it stock market value from now to 2016 doubling Aliko Dangote’s networth and moving him up the Forbes rich list ranking.

But besides cement, Dangote’s massive investment in another major growth but under developed area, petrochemicals is what could easily propel him to top of the Forbes rich list. In September, 2013 Dangote signed a major $3.3 billion debt financing deal to finance the construction of $9 billion petrochemical complex which will comprise a refinery and fertilizer plants. The plants are planned to be the biggest in Africa. The business viability of these ventures are almost guaranteed giving that Nigeria, Africa’s biggest economy and crude oil producer, currently import almost 90% of its refined crude oil product needs.

The Fertilizer plants are also expected to flourish considering that Agriculture remains the fastest growing sector of the Nigerian economy and still has significant growth potential. The petrochemical plants will double Dangote’s networth further.

Moneyissues forecast is that, going by the current investment trend in the Nigerian economy and the massive investment in key sectors of the Nigerian economy by the Dangote Group and its dominant control of these sectors, Aliko Dangote would be worth a minimum of  $100 billion by 2020 when all its current projects are up and running.

The biggest risk against this forecast is the chance that Dangote loses political support, which will impact negatively on many of his investments in the Nigerian economy.