Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Africa's richest person says the time is right for Nigeria
Speaker 2: to end its fuel subsidy.
Speaker 3: The removal of subsidy is totally dependent on the government,
Speaker 3: not on us. But I think at the end of
Speaker 3: the day, this subsidy will have to do.
Speaker 2: But can the billionaire's latest venture help revive the economy
Speaker 2: of Africa's top oil producer.
Speaker 3: Ninety percent of the entire world did not really give
Speaker 3: us a chance. Nobody really believe we'll come fully talk,
Speaker 3: but we did.
Speaker 2: On this episode of The Next Africa Podcast, we'll take
Speaker 2: a deeper look at Alico dan Gote's exclusive interview with
Speaker 2: Bloomberg and why what he says about the Nigerian economy
Speaker 2: really matters. I'm Jennifer's Abasaja and this is the Next
Speaker 2: Africa Podcast, bringing you one story each week from the
Speaker 2: continent driving the future of global growth, but the context
Speaker 2: only Bloomberg can provide. And Nduka Orgimo is a Bloomberger
Speaker 2: reporter based in Abuja and he's joining us now and
Speaker 2: also has been covering this story very closely.
Speaker 4: Hi in Duka, how are you hi?
Speaker 1: Jenna fine? Thank you?
Speaker 2: Good So this was a pretty extensive interview and some
Speaker 2: word that we got from dan Gote. But let's maybe
Speaker 2: start with some background about who he is. Who is
Speaker 2: the Lego dan Gote and how did he get to
Speaker 2: being the richest person in Africa right now?
Speaker 5: He's an old school industrialis Yeah, it almost feels like
Speaker 5: he's from another era. He comes from you a wealthy family.
Speaker 5: I mean, he says to himself. His great grandfather was
Speaker 5: one of the richest presents in Africa in the nineteen forties.
Speaker 5: His late grandfather was also one of the wealthiest ninetels
Speaker 5: at the time. His father was Fela Vishtu, died when Dangote.
Speaker 1: Was ets old. He's cold in Egypt.
Speaker 6: Came back to n Nigeria in nineteen seventy eight ish
Speaker 6: and started trading in in cements, started trading in sugar
Speaker 6: and in other commodities.
Speaker 1: But it was in two thousand and.
Speaker 5: Seven that he began to manufacture his own cements here
Speaker 5: in Nigeria and.
Speaker 1: That's when his wealth really took off.
Speaker 5: But if you want to trace his wealth, I think
Speaker 5: it's down to that explosion of his cement's manufacturing in
Speaker 5: Nigeria and then his expansion to other Africa countries.
Speaker 1: His at the moments, he's transitioning.
Speaker 5: Into what we think is the next face of his empire,
Speaker 5: which is still in this mega refinery in Legos. That
Speaker 5: refinery is the largest in Africa. It can refine fifty
Speaker 5: thousand bars of fruit per day.
Speaker 2: And I think what's important to note too in Duka
Speaker 2: is this was a long time coming. At the same
Speaker 2: time he talks about now is the time to end
Speaker 2: the subsidies because of the refinery that he has built.
Speaker 2: Can you maybe give us some context as to how
Speaker 2: oil is being and has been subsidized in Nigeria and
Speaker 2: why he's saying now is the time.
Speaker 5: You need to understand Aura's place in North Africa's top
Speaker 5: all nations. Nigeria is the continuous largest fruit producer. However,
Speaker 5: Nigeria is unable to refine its own fruit domestically. So
Speaker 5: what has happened over time is that Nigeria has shipped
Speaker 5: food oil to refine us a build in Asia and
Speaker 5: in Europe and then has had to import refined fuel.
Speaker 5: What has happened over time in Nigeria is that Nigermians
Speaker 5: have had to pay one of the cheapests.
Speaker 1: For gasoline in the world that's refined.
Speaker 5: Photograts imported by the government is then subsidized. Wearing Nigerias
Speaker 5: don't pay the full market value at the pump. Nigeria's
Speaker 5: have paid the cheapest for a very long time, since
Speaker 5: probably nineteen seventies. That's when the government first introduced the
Speaker 5: subsidy into into the economy, and Juras tend to see
Speaker 5: it as their own share of what they call the
Speaker 5: national kick, and this is governments in ability to provide
Speaker 5: other basic amenities. The schools are not in the best shape.
Speaker 5: What are in most cities. The roads are not in
Speaker 5: the best shape. You know, you don't have stable electricity.
Speaker 5: So I think the government has how to compensate for
Speaker 5: this incompetence, almost by then subsidizing gasoline that Nigerians think
Speaker 5: is giving resources that it should be paying the cheapest
Speaker 5: value for.
Speaker 2: That sort of paints the picture very clearly in Duga
Speaker 2: about how sensitive potentially the issue is.
Speaker 4: Let's hear from dan Gote on this in particular.
Speaker 3: Subsidy is a very sensitive issue. If you know, I
Speaker 3: believe the problem is not only the subsidy. It is
Speaker 3: problem that you know, once you are subsidizing something, then
Speaker 3: people will be blotting the numbers and government will end
Speaker 3: up paying what they're not supposed to be paying. But
Speaker 3: this refinerary will bring quite a lot of issues up there,
Speaker 3: you know, it will show the real consumption of Nigeria.
Speaker 3: We have to make a profit. We build something worth
Speaker 3: twenty billion dollars, so definitely we have to make money.
Speaker 3: The removal of subsidy is totally dependent on the government,
Speaker 3: not on us. We cannot change you know, price, but
Speaker 3: I think, you know, the government will have to, you know,
Speaker 3: give up something for something, you know, so I think
Speaker 3: at the end of the day, the subsidy would have
Speaker 3: to go.
Speaker 2: You know, when Duga you were just talking about the
Speaker 2: complexities with the subsidies for all people involved, especially for
Speaker 2: the government, right because removing it would create people upset
Speaker 2: and uproar, especially considering the cost of living.
Speaker 5: Exactly, it's more a political issue than an economic one.
Speaker 5: And you have to understand that it's a huge drain
Speaker 5: on Nigeria's resources. So in twenty two, Nigeria's pains you know,
Speaker 5: around ten billion dollars to subsidize gasoline, So that's monion
Speaker 5: that could have been spent on many other things.
Speaker 1: And the World Bank and IMF.
Speaker 5: And you have long called for the government to self
Speaker 5: subsidize in fuel, especially gasoline, but it's difficult to do so.
Speaker 5: And I'll take you back to twenty twelve when the
Speaker 5: government of then President Bulog Jonathan attempted to remove fuel
Speaker 5: subsidi on gasoline, and there was this huge protest and
Speaker 5: that protest governized your position to then topple the incumbent,
Speaker 5: that's Bulllogjenathan three years later at the general elections in
Speaker 5: twenty fifteen. When President Bonatino came in last year in May,
Speaker 5: he promised to remove the subsidient gasoline and then reinvest
Speaker 5: all that money elsewhere. What then happened was that inflation
Speaker 5: that was already high, skyrocketed, and then price of transport
Speaker 5: went up, and of course went up.
Speaker 1: Price went up, and the government ceotic was unsustained.
Speaker 5: So two months later, in August, there was a cap
Speaker 5: on the price of gasoline. So in effect, subsidy of
Speaker 5: gasoline was re introduced by President Polacin.
Speaker 1: But just to give you an idea of how.
Speaker 5: Difficult it's being to to actually end and the subsidy,
Speaker 5: andreas are still not paying the true cost of gasoline.
Speaker 5: But the government is hoping now that we the refinery
Speaker 5: coming on board, it can effectively end any subsidy on gasoline.
Speaker 5: But I think the truth test of whether or not
Speaker 5: Nigerians want to start paying the true value of gasoline
Speaker 5: at the comps is when we see that fluctuation again
Speaker 5: of food. Gwen pop So Andrians are getting to the
Speaker 5: market at the time when crude when it goes up.
Speaker 5: I guess doesn't see the truth test of this policy.
Speaker 2: That was a really great picture that you just painted
Speaker 2: in Duga and just the fluctuations and the really the
Speaker 2: history and the story of crude and Nigeria and its
Speaker 2: effect on Nigerians with us and DUCA. When we come back,
Speaker 2: we'll have more on Africa's purchase man. Welcome back today
Speaker 2: on the podcast, we're looking at Africa's industrialists. Aliko, Deng
Speaker 2: Goote and Duka is still with us SO and Duka.
Speaker 2: Let's look more at the man behind the empire. Right.
Speaker 4: He talked about how he.
Speaker 2: Is a massive Arsenal fan and has been linked with
Speaker 2: the club in the past, but perhaps the dreams that
Speaker 2: he had of yesteryear have have moved on.
Speaker 4: Let's play a clip from what he told us earlier.
Speaker 3: This week, Asina is doing extremely very well. That time
Speaker 3: Asenau wasn't doing well. I think, you know, I don't
Speaker 3: have that kind of excess liquidity to go and buy
Speaker 3: a club for four billion dollars so to speak, or
Speaker 3: rather do something of the money. What I will do,
Speaker 3: I'll continue to be the biggest fan of Arsenal. Every day,
Speaker 3: anytime that they are planing, I would watch, So I
Speaker 3: will remain a major supporter of Arsenal. But I don't
Speaker 3: think if it makes sense today to buy Arsenal.
Speaker 4: Do you regret not buying it before?
Speaker 3: We Actually I regret not buying is before. But you know,
Speaker 3: my money was more needed in completing my project than
Speaker 3: buying Arsenal.
Speaker 4: So you would have bought it for two billion, I would.
Speaker 3: Have bought it for two billion, yeah, but you know
Speaker 3: I wouldn't have been able to finish my project, you know.
Speaker 3: So it's either finished your project, will go and buy Arsenal,
Speaker 3: And I think the best decision was for us to
Speaker 3: now go and complete our refinery.
Speaker 2: So Druka football is important to many people, but maybe
Speaker 2: you can tell us just how important is it to
Speaker 2: a legal.
Speaker 5: And go to Well, this is my favorite part of
Speaker 5: the show because I can talk about us now. And
Speaker 5: that's one thing I share a couple with with We
Speaker 5: are both Arsenal fans. He's a big fan of the
Speaker 5: North London club. He's been a lifelong supporter and a
Speaker 5: few years back he started hearing that he was interested
Speaker 5: in buying Arsenal Football Club. Whether or not the club
Speaker 5: was up for sale was a different math altogether, but
Speaker 5: it seemed like she was serious about buying Arsenal. He
Speaker 5: was interested in buying the club when they were not
Speaker 5: doing quite well in the English Premier League.
Speaker 1: But now if we are competing for the Championship once again.
Speaker 5: But he thinks that his money is his best it
Speaker 5: lies elsewhere and he's giving up a north farce of
Speaker 5: buying the club. What he insisted he still remain the
Speaker 5: biggest fan of the club in Nigeria.
Speaker 2: Wow, bigger than in Duka. Really we'll see. So, I
Speaker 2: guess on the one hand, it's a dream loss. But also,
Speaker 2: as you said, as an Arsenal fan for yourself, the
Speaker 2: team is doing well right, so potentially good for both
Speaker 2: of you. And let's just finish on what more we
Speaker 2: learned from Dan Gote. What really stood out to you,
Speaker 2: as somebody who is covering what is happening in the
Speaker 2: country day and day out, what is it that you
Speaker 2: are paying close attention to?
Speaker 4: Based on what deng Goo tees.
Speaker 5: We learned for the first time that he's now opening
Speaker 5: a family office in Dubai and it's going to be
Speaker 5: headed by his daughter Halima. Now this this office in
Speaker 5: Dubai is going to seek out global investments to basically
Speaker 5: diversify the grovesholders beyond its industrials. At the moments, we
Speaker 5: have for a while now been wondering what's his succession
Speaker 5: plan is, and that give us an idea how he
Speaker 5: sees the empire progressing when he's no longer here. And
Speaker 5: then the big bid for me was him saying that
Speaker 5: he thought it was a big mistake on the part
Speaker 5: of the States owned NNPC, so I've dropped their stake
Speaker 5: in its refinery. The NFPC is okay twenty percent stake
Speaker 5: in the Dangote refinery, but re learned in June this
Speaker 5: year that that stick had been cut to seven percent,
Speaker 5: and he's said in that interview that it was a
Speaker 5: big mistake for the NPSIS to QUOTDS stakes. So I
Speaker 5: think it tells you a lot about what he sees
Speaker 5: the potentials of their finarity, thinks he's going with that project.
Speaker 5: To say that the state's minute dig mistake taking up
Speaker 5: the full twenty percent, I think speaks a lot about
Speaker 5: how do antipas himself to really make a killing off
Speaker 5: of the projects in Legos.
Speaker 2: It was really a wide ranging interview and fascinating to
Speaker 2: hear from him and Duka. Thank you so much for
Speaker 2: joining us, for walking us through it, and also for
Speaker 2: your reporting today and every day.
Speaker 4: Really appreciate it.
Speaker 1: Pleasure and you can see.
Speaker 2: The interview on Bloomberg right now, and we'll also link
Speaker 2: it to Induka's Nigeria coverage that will be in our
Speaker 2: show notes. Other stories we're watching in the region this week.
Speaker 2: The World Bank is in talks with Uganda to find
Speaker 2: a compromise over anti LGBTQ legislation to try to end
Speaker 2: a freeze in lending. Civil rights groups are warning any leniency, though,
Speaker 2: will set a global precedent. Also, President Biden is set
Speaker 2: to make a trip to Ngola of filling his promise
Speaker 2: to visit the continent before his presidency is over. He'll
Speaker 2: hope to use the trip to convince African leaders that
Speaker 2: the region is still a priority for the US. You
Speaker 2: can follow these stories across Bloomberg, including the Next Africa Newsletter.
Speaker 2: We'll put a link to our newsletter in the show notes.
Speaker 2: This program was produced by Adrian Bradley. Don't forget to
Speaker 2: follow and review this show wherever you usually get your podcast.
Speaker 2: I'm Jennifer's Abisanja. Thank you so much for listening.