Aliko Dangote has described the difficulties he encountered in the booming Nigerian textile sector and the reasons behind the closure of his two plants. During his keynote address at the 2024 Manufacturers Association of Nigeria (MAN) summit in Abuja, Dangote related his own experience, stating that his company lost billions of naira in investment as a result of his introduction into the textile industry.
The chairman of the Dangote Group said that after the 1960s textile boom, his company invested billions of naira in the sector. However, the closure of the two factories was caused by the absence of government protection through policy decisions. Dangote stated that in order to pay the pensions and gratuities of the employees, he had to sell Liberty Merchant Bank for N1.2 billion.
"We proceeded and established our own textile mills in Kano, named Dangote General Textile Mills, during the boom in the textile industry. At that time, we made significant billion-dollar investments." We also went and purchased the foreign shareholder of Nigeria Textile Mill, a textile factory that Chief Obafemi Awolowo established for the Western Region. It was 1960.
In the end, there was no security provided by the government. Both of the factories had to be closed. Actually, we had to postpone. The Nigeria Textile Mill presented the biggest obstacle for us because most of their employees had been there for 25 to 30 years, making it challenging for us to pay their pension and gratuity.
Fortunately for us, someone recently expressed interest in purchasing Liberty Merchant Bank, our bank. I received N1.2 billion when we sold Liberty. The industry spent N985 million on pensions and gratuities after making N1.2 billion in profits, all in order to exit the market. We have now left the company in this manner.
We burned our fingertips," stated Dangote. It's interesting to note that Dangote claimed that former President Obasanjo later encouraged him to engage in the textile sector, but he was forced to decline the suggestion because of his prior experiences. The business tycoon continued, "Even when Obasanjo requested us to come back and invest in textiles, I told him no, thank you."