The news that the Nigerian businessman, Aliko Dangote, plans to expand his business interest into steel production, electricity generation, and port development as part of his broader ambition to accelerate industrialisation in Africa deserves a quick reflection on the promises it carries for Nigeria. It is coming from Dangote at the time when many African countries, including Nigeria, are still struggling with below average industrial capacity. This move speaks to something important about how prosperity is actually built.
In their Influential book ‘The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty,’ Clayton Christensen, Efosa Ojomo, and Karen Dillon argue that countries rarely overcome poverty through aid, policy declarations or resource endowments alone. According to them, the effective engine of prosperity has always been market-creating innovations by private and public enterprises that build new industries, generate jobs, and expand economic opportunities for ordinary people.
Even though their theory focuses largely on creating something new or producing it in an exceptional way, Dangote’s new industrial ambition seems closer to the latter. It is about producing essential things at a scale and efficiency that the existing system has failed to achieve.
Take, for example, the electricity sector in Nigeria. Since the beginning of the current Fourth Republic, billions of dollars have been allocated to power sector reforms yet electricity supply remains unstable, and many Nigerians still depend heavily on generators to power their homes and businesses. The situation has continued to deteriorate despite the enormous resources committed to the sector by the coming of every new administration.
This is not surprising. In The Prosperity Paradox, the authors explain how nations and even international organisations sometimes keep investing huge resources in certain activities only to realise much later that they were simply hitting the wrong target. The problem is not always the lack of funding; sometimes it is the absence of a functioning market system capable of producing and distributing essential services efficiently.
Seen from this perspective, Dangote’s move into electricity generation may mean more than just an investment. It could be an attempt to tackle one of the most critically lingering bottlenecks in Nigeria’s economic development. If I were to be asked to decide which sector Dangote should begin with in this new industrial plan, I would unhesitatingly choose electricity. It is the most embattled, deeply corrupted that is seemingly jeopardized beyond repair, yet the most important sector for the everyday life of citizens.
Stable electricity has the power to transform productivity across every sector. When power supply becomes reliable, small businesses are created, productivity is boosted across all sectors, and households enjoy a better quality of life. Nigeria’s long-standing energy poverty has been strangulating the productive potential of millions of people for decades. Fixing that problem alone would unlock enormous economic possibilities more than expected.
Beyond the issue of productivity, Dangote’s entry into these sectors could also stimulate competition. Healthy competition is one of the most effective drivers of efficiency in any economy. The example of the refinery project already shows how a large-scale private investment can disrupt long-standing structural weaknesses within a sector. A similar dynamic in the proposed sectors could encourage other investors to participate and expand industrial capacity.
Nigeria, By 2030, is projected to need 30 to 40 million new jobs to absorb its rapidly growing population. The scale of this challenge means that the government alone, especially in the Nigerian context, cannot create the necessary opportunities to fill this gap. Private enterprises will have to play a major role in expanding productive sectors of the economy. If supported by the right policy environment, they could contribute significantly to narrowing Nigeria’s widening job gap.
Of course, no single business initiative can solve all structural challenges in the economy. But bold investments of this nature often serve as catalysts for broader economic transformation. With the right support and healthy competition from other investors, initiatives like these could help push Nigeria closer to the kind of industrial foundation that many developed economies built decades ago.
In the end, the lesson is simple: prosperity rarely emerges from policy debates alone. It often begins with large-scale productive ventures that reshape markets, unlock productivity at both small-scale and large-scale businesses, and create direct and indirect economic opportunities for millions of common men and women.
- Isah Kamisu Madachi is a policy analyst and development practitioner. He writes via [email protected]
