Dangote advocates backward integration at Economist Summit
Africa’s richest man and Nigeria’s front line businessman and president of the Dangote group, Aliko Dangote, the nation and corporate entities need to adopt the backward integration strategy to get the economy out of the woods.
Backward integration is a popular competitive strategy by which a company controls more of its supply chain, thereby lowering costs and ensuring access to key materials, but can also be indirectly used manipulate competitors by affecting their access to raw materials as well. In some cases, several companies might band together to purchase and control a supplier.
According to Dangote, the lower price of crude oil on the global market is not synonymous with doom, especially for Nigeria’s economy and sorporations should look inwards to survive the present spell. He stated that against the backdrop of current rising inflation, the price of cement in Nigeria is the cheapest in the continent.
Dangote, who lamented the evil of policy inconsistency by successive governments in the country stated that the Nigerian economy would grow if the government is consistent in its policies, adding that lack of capacity was the bane of Nigerians exporting their products.
He emphasised that improved local production capacity and self-sufficiency would help grow the naira.
“The way to manage the exchange rate is to be self-sufficient and export materials,” he said. “The issue with Nigerian exports is capacity. Most Nigerian companies are not geared up for exportin,” he posited.
The summit which attracted notable individuals as speakers which include Vice President Prof Yemi Osinbajo, Alhaji Aliko Dangote, President and Chief Executive Officer, Dangote Group and Chairman Dangote Foundation; Danladi Verheijen, Chief Executive Officer and Managing Director, Verod; Herbert Wigwe, Chief Executive Officer, Access Bank; HE Okechukwu Enelamah, Minister of Industry, Trade and Investment, Nigeria, would be roundedoff Tuesday.
The 2016 Nigeria Summit is targeted at key government ministry officials, industry and business leaders as well as representatives of Nigerian civil society; together with international investors, economists and academics to discuss and debate Nigeria’s economic direction.
