Africa’s richest man, Aliko Dangote, has shared a sobering tale about his company’s venture into Nigeria’s textile industry during the 1960s. At the 2024 Manufacturers Association of Nigeria (MAN) summit in Abuja, Dangote recounted how his company invested heavily in the industry, only to be met with government policy decisions that ultimately led to the closure of two factories.
According to Dangote, his company had to pour billions of naira into the industry, setting up two factories in Kano and acquiring a textile mill established by Chief Obafemi Awolowo. However, the lack of government protection forced both factories to shut down. The company faced significant challenges in paying off the retirement benefits of workers who had spent up to three decades with the company.
The experience was so costly that Dangote had to sell his bank, Liberty Merchant Bank, for N1.2 billion just to settle those debts. “We burnt our fingers,” he said, recalling the ordeal.
Although Nigeria has a massive market potential for cotton production, the country’s textile industry is still struggling. In the 1970s, Nigeria was a hub for textile production, with over 180 textile mills employing over one million people. However, recent data from the National Bureau of Statistics shows that textiles contributed negatively to Nigeria’s Gross Domestic Product (GDP) in the first quarter of 2024.
In an effort to revitalize the industry, the Minister of Industry, Trade and Investment has announced a $3.5 billion deal with Afreximbank to support the sector.
Dangote’s experience serves as a warning for investors and policymakers alike, highlighting the need for government support and protection to revitalize Nigeria’s textile industry.
