How to get out of recession – Dangote

Aliko Dangote is Africa’s richest man. He owns the Dangote Group. In this exclusive interview with the CNBC, Dangote says the only way Nigeria can get out of the current recession is to move quickly into action by selling some assets. He recommends the sale of NLNG to raise about $15 billion to be used to beef up the nation’s reserves.

West Africa is doing well despite economic downturns

If you look at most countries in West Africa, despite the economic challenges, they are actually doing pretty well. I mean, look at Cote d'Ivoire, they are still at about 9.4 percent. You look at Ghana, second quarter, 4.9 percent. You look at even Togo, it has gone up a bit from 5.1 percent to 5.8 percent. Benin republic 5.2 percent. I can go on and on.

Why Nigeria is in recession

Our own is a little bit severe. And I think one of the major problems, what really caused it is that 90 percent of the government’s foreign exchange earning is from oil. Also if you look at it, 70 percent of government revenue is also from oil. We had an issue for a very long time in terms of diversifying the economy. The economy should have been diversified long time, not even now.

How Nigeria can recession get out of

The only thing that we need to do is to go and make sure that we push through by looking at how do we get out of this recession. And the only way for us to get out of this recession is for us to try and make sure that we move quickly into action by diversify the economy.

The real challenge is the political will to sell assets

But I think the real challenge for us is for now for us to have the political will in terms of selling some assets. I think it is an easier route than going to the IMF or the World Bank to borrow money because what we need to do is actually to beef up the reserves. How long do I think that we are going to get out of this? It depends on the political will. As a business person, if I have challenges in my company, I will not hesitate for any asset to remain afloat to get to better times because It doesn't make any sense for me to keep any asset and then suffocate the whole organisation. We have a lot of assets to sell. We can sell part of the joint venture companies, I mean part of the shares. Government normally own 60 percent. They own 40 percent. We can easily sell additional 11 percent to either them or to any other international company in an open tender. We can change the terms and make it like an operating entity just like what we have in NLNG.

Let government Finance Corporation sell African

We also have another asset that I think the government doesn't really need through the Central Bank. It is the African Finance Corporation. African Finance Corporation can fetch them easily 800 million dollars. My own suggestion before was they should even sell 100 percent of NLNG because government has no business investing in sectors like NLNG. They have gotten a lot of money. They have average of about 1.5 billion dollars in terms dividends. I'm sure a company like that with earnings of 1.5 billion dollars in average, they should get any where between $12 to $15 billion.