Africa’s Richest Man Aliko Dangote Explains Why His Cement Is Cheaper Outside Nigeria
For decades, Aliko Dangote has stood at the center of Nigeria’s industrial ambition. Through the Dangote Group, the billionaire businessman has built a manufacturing empire spanning cement, sugar, flour, and most recently, oil refining, consistently championing local production as the pathway to economic independence and job creation.
Yet two persistent questions continue to dominate public discourse: why Dangote Cement is often cheaper in foreign markets than within Nigeria, and why his landmark $20 billion refinery, designed to ease Nigeria’s fuel crisis, is facing resistance at home.
Dangote has now addressed both issues, shedding light on the structural challenges confronting local manufacturers in Africa’s largest economy.
Why Dangote Cement Costs Less Outside Nigeria
Speaking during a press briefing on Monday, Dangote attributed the price disparity between locally sold cement and exported cement to Nigeria’s heavy tax and regulatory framework.
According to him, exporting cement allows his company to bypass multiple layers of taxes and statutory deductions that significantly inflate production costs within Nigeria.
“When you look at my invoice, the cement I export is cheaper than the one I’m selling domestically, because that’s how exports work,” Dangote explained. “In export, I’m saving a lot of money. I’m not paying 30% income tax, I’m not paying 2% education tax, I’m not paying 1% health levy, I’m not paying 7.5% VAT, and I’m not paying 10% withholding tax.”
By avoiding these cumulative costs, Dangote said he is able to price his cement competitively in global markets against producers from Turkey, Russia, and China, countries with more streamlined industrial policies.“So when you reduce all these taxes, I can afford to go and compete with the international market,” he added.
The reality, he argued, is that Nigeria’s fiscal environment paradoxically makes it cheaper to sell Nigerian-made goods abroad than at home. As a result, local consumers ultimately shoulder the burden of multiple taxes, levies, and regulatory inefficiencies.
Dangote’s explanation highlights a broader structural issue: while local manufacturing is often promoted as the solution to high consumer prices, inconsistent policy frameworks and high operating costs can undermine that very goal.
Resistance to a Refinery Meant to End Fuel Scarcity
The same policy tension, Dangote suggests, is playing out around the Dangote Refinery, the largest single-train refinery in Africa, constructed to end Nigeria’s decades-long dependence on imported fuel.
Fuel shortages and long queues have plagued Nigeria since the early 1970s. Dangote maintains that the refinery directly addresses this historical challenge by boosting local refining capacity, conserving foreign exchange, and creating thousands of jobs.
Despite these promises, the project has encountered criticism and resistance. Concerns range from fears of market dominance and pricing power to discomfort over a strategic national asset being controlled by a private entity. Others have questioned why fuel prices have not dropped as sharply or as quickly as expected.
Dangote pushed back against the criticism, emphasizing the refinery’s long-term value to the nation.
“Since when has Nigeria been having problems with fuel queues? Since 1972,” he said. “Somebody has addressed this problem, and you’re calling the company that addressed this issue names.”
A Call for Investment, Not Imports
Addressing concerns over competition, Dangote argued that Nigeria should focus on encouraging more domestic investment rather than relying on fuel imports to regulate prices.
According to him, a competitive local market, supported by multiple investors, would naturally balance pricing power and enable effective regulation.
“What you do is you invite more people to invest,” he said. “When you have many investors, then you can regulate market shares. You don’t use imports to checkmate domestic production, because you are creating jobs elsewhere.”
His remarks point to a deeper issue: the challenge may not lie with manufacturers themselves, but with the broader economic ecosystem in which they operate.
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Dangote’s explanations underscore a critical contradiction in Nigeria’s economy. While the country aspires to industrial self-reliance, the high cost of doing business, inconsistent regulations, and heavy taxation continue to penalize local production.
Until these structural barriers are addressed, the paradox of cheaper exports and controversial homegrown solutions is likely to persist, no matter how ambitious the investment or how transformative the vision.
