Africa’s wealthiest man, Aliko Dangote, has revealed that his investment in Nigeria’s textile industry became the biggest business mistake of his career, with the collapse of the operations eventually costing thousands of jobs.
Reflecting on his decades in business, Dangote said his textile ventures were overwhelmed by imported products from China and India, while inconsistent government policies left domestic manufacturers struggling to compete.
The experience forced him to close textile factories and retrench almost 8,000 workers, including 6,920 employees at Nigerian Textile Mills in Ikeja, Lagos.
Dangote’s account offers an unusually candid look at one of the major failures behind the business empire he has spent decades building.
Dangote: “My biggest business mistake was textiles”
Speaking to ARISE News anchor Ojy Okpe, Dangote described the textile investment as his biggest business mistake.
“We did textiles and the textiles ended up going under because government policy did not protect our businesses,” he said.
Dangote said the businesses were eventually overwhelmed by what he described as Chinese and Indian dumping.
“So eventually we had to close down,” he said.
The comments were made during a broader discussion about the challenges facing Nigerian manufacturers, including government policy, electricity costs and access to finance. ARISE News reported that Dangote continues to regard inconsistent government policies and inadequate electricity as major obstacles to industrialisation in Nigeria.
Almost 8,000 workers lost their jobs
The financial consequences of the failed textile operations were accompanied by a substantial employment impact.
Dangote said almost 8,000 workers were laid off when the businesses were eventually shut down.
Of that number, 6,920 employees at Nigerian Textile Mills in Ikeja alone were affected.
He recalled that the company had to make substantial payments to workers as it exited the industry.
The scale of the retrenchments illustrates why the collapse was more than a failed investment for Dangote’s group. It also affected thousands of households that depended on the factories for employment.
Why Dangote says the textile business failed
Dangote attributed the collapse primarily to the competitive pressure created by imported textile products and what he regarded as insufficient protection for local manufacturers.
The argument reflects a long-running challenge for Nigeria’s manufacturing sector: local factories must contend with the cost of producing goods domestically while competing against imported products that can enter the market at lower prices.
For manufacturers, the problem can become particularly acute when production costs include expensive electricity, financing, transport and other infrastructure-related expenses.
Dangote has recently highlighted the cost of borrowing as another major obstacle to industrial investment. In the same series of ARISE News interviews, he said interest rates of around 30% make industrialisation extremely difficult, recalling that his group once paid interest rates as high as 44% while developing its Obajana cement plant.
The lesson Dangote took from the failure
The textile collapse appears to have influenced how Dangote approaches large investments.
Rather than viewing government protection as something a business can depend on indefinitely, he has said the experience taught him that companies must ultimately be able to remain commercially viable even when favourable policies change.
That lesson is particularly relevant to Dangote’s current industrial strategy, which includes some of Africa’s largest manufacturing investments.
His group has expanded far beyond the textile sector into cement, fertiliser, food production and petroleum refining.
The Dangote Petroleum Refinery, which began production in 2024, is now at the centre of his industrial strategy and is being taken to the public market through a major Nigerian share offering.
From failed textiles to a massive refinery bet
The contrast between Dangote’s textile experience and his current investments is striking.
The textile businesses were relatively vulnerable to imported competition, while his newer projects are designed around large-scale domestic production in sectors where Nigeria has historically relied heavily on imports.
Dangote has described the refinery and fertiliser investments as among the biggest risks he has taken.
He recently disclosed that he pledged his assets as collateral and personally guaranteed $3.7 billion in financing connected to those projects. Despite the scale of the risk, he said his group had never defaulted on a bank loan during his 47 years in business.
The refinery is also being positioned as a broader manufacturing and energy project rather than simply another business investment.
Dangote has argued that domestic industrial capacity can help Nigeria reduce dependence on imported products, although the success of such projects remains dependent on factors including infrastructure, financing, policy stability and access to raw materials.
A warning about industrial policy
Dangote’s recollection also puts a spotlight on the difficult balance between free trade and protecting domestic industry.
His description of imported products as “dumping” reflects his own assessment of what happened to his textile businesses. Establishing whether imported goods met the legal definition of dumping would require separate evidence and a formal trade investigation.
What is less disputed is the broader consequence he described: domestic textile production declined sharply over decades, while imported goods became increasingly important in the Nigerian market.
For Dangote, the experience appears to have reinforced the importance of policy stability when committing billions to long-term manufacturing projects.
A costly lesson that shaped Dangote’s strategy
The textile venture may have been one of Dangote’s biggest setbacks, but his recollection of it now serves as an insight into how his investment strategy evolved.
The collapse demonstrated the risks of building large manufacturing operations in an environment where domestic producers face intense import competition and high operating costs.
Nearly three decades later, Dangote is betting on a different model: massive industrial projects intended to produce goods locally at a scale capable of competing with imports.
His textile experience therefore remains relevant not simply because it was a costly failure, but because it illustrates one of the central challenges facing African industrialisation — how to build globally competitive domestic manufacturing while creating an economic environment in which those factories can survive.
