Dangote Cement’s revenue growth lifts Nigeria’s Gross Domestic Product

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Figures from the Nigerian Bureau of Statistics (NBS) show that the manufacturing sector of the Nigerian economy was one out of four major sectors in the non-oil sector that helped the country’s Gross Domestic Product (GDP) grow by 2.38 percent in real terms (year-on-year) in the fourth quarter of 2018.

The report revealed that the nominal GDP growth for the manufacturing sector was recorded at 33.57 percent, which is 24.37 percentage points higher than the rate recorded in the corresponding period of 2017 (9.20 percent).

The manufacturing sector comprises of 13 activities: Oil Refining; Cement; Food, Beverages and Tobacco; Textile, Apparel, and Footwear; Wood and Wood products; Pulp Paper and Paper products; Chemical and Pharmaceutical products; Non-metallic Products, Plastic and Rubber products; Electrical and Electronic, Basic Metal and Iron and Steel; Motor Vehicles and Assembly; and Other Manufacturing.

The improved contribution of non-oil sector and by extension the manufacturing subsector to GDP growth have been applauded by economic pundits, but the contribution of Dangote Cement in the revival of the near comatose manufacturing space in Nigeria cannot be ignored.

Dangote Cement, which is the largest capitalised company on the Nigerian Stock Exchange, with a market capitalisation of about 3.4 trillion naira was a major contributor to growth in GDP in 2018 with record revenue of 901 billion naira in its financial year ended December 31, 2018.

Dangote Cement Group has established manufacturing plants across major countries in Africa and grew total revenue by 11.9 percent from 805.58 billion naira in December 31, 2017 to 901 billion naira in 2018.

Going by the details in the group’s audited financial records for 2018, revenue was largely driven by the Nigerian market where revenue grew by 11.9 percent from 552.36 billion naira in 2017 to 618.30 billion naira. The implication is that consumption of cement in Nigeria in the year reviewed increased by 11.9 percent or about 66 billion naira.

Dangote Cement accounted for 0.5 percent of nominal GDP in 2018 considering the 618.30 billion naira total revenue generated from the local market in comparison to an aggregate nominal GDP of 127.76 trillion naira recorded by Africa’s largest economy in 2018.

Speaking on the performance, Group Chief Executive Officer of Dangote Cement, Joseph Makoju, said “this is a record financial performance by Dangote Cement, driven by a strong increase in our home market, Nigeria, despite heavy rains and uncertainties about the election”.

Makoju also said that “although Pan-African volumes were unchanged in 2018, I am confident that we will see an increase in 2019, driven by higher volumes in Tanzania, Ethiopia, Congo and Sierra Leone. Now that we have gas turbines operating in Tanzania we will also see increased profitability in the Pan-Africa region and this will help to improve overall Group margins”.

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