I’ve Paid $2.4bn of $5.5bn Borrowed to Build Refinery, Dangote Says

Africa’s richest person and founder of the Dangote Group, Mr Aliko Dangote, on Wednesday disclosed that he had already offset about $2.4 billion of the $5.5 billion he borrowed to build his $19 billion refinery located near Lagos.

Speaking at the Afreximbank Annual Meetings (AAN) and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas, the billionaire businessman further stated that several entities, both local and foreign, did everything to sabotage the 650,000 barrels per day facility.

Stressing that many persons thought that the project was going to fail, he lauded the Afreximbank and Nigeria’s Access Bank for supporting the project, noting that the vision would have died without them.

He noted that without banks like African Finance Corporation (AFC), AfreximBank and others, it would be difficult to industrialise the African continent, because they are the financial institutions that understand the challenges and the issues peculiar to the continent.

Without mentioning names, the businessman stated that foreign banks are not interested in helping Africa grow, explaining that indeed some of them clandestinely attempted to push the company into loan default during the COVID-19 pandemic.

Describing the situation as very scary, he stated if he had raised the idea of international project financing with some of them, the international banks would have shut it down because they would “ Ask for my great-grandmother’s certificate of birth.”

“We borrowed the money based on our own balance sheet.  I think we borrowed just over $5.5 billion. But we paid also a lot of interest as we went along, because the project was delayed because of lack of land, also the sand-filling took a long time. Almost five years or so we didn’t do anything.

“We actually started in 2018. We borrowed that much. We have actually, of course, paid interest and some principal, about $2.4 billion. We ‘ve done very well. We now have only about $2.7 billion left to be paid. So we’ve done very well for a project of that magnitude,” he said.

On whether he was receiving enough crude oil as feedstock for his refinery from the International Oil Companies (IOCs), Dangote said that those who had access to cool money for decades would not want the opportunity to slip and would always fight back.

“In a system where for 35 years people are used to counting good money, and all of a sudden they see that the days of counting that money have come to an end, you don’t expect them to pray for you. Of course you expect them to fight back.

“And I think that is the process that we’re now really going through. But the truth is that, yes, the country, the sub-region, and also the continent, sub-Saharan Africa, need this refinery. So, you expect them to fight through non-supply of crude, non-purchase of the product, but I think it’s all temporary. We’ll get there,” he added.

Stressing that he knew there would always be a pushback, Dangote pointed out that what he did not envisage was that it would be so vicious

“ Well, I knew that there would be a fight. But I didn’t know that the mafia in oil, they are stronger than the mafia in drugs. I can tell you that. Yes, it’s a fact,” he mentioned , stressing that the local and foreign mafia tried several times to sabotage the refinery from coming to fruition.

Describing himself as someone who has fought all his life, Dangote posited that the mafias ‘tried all sorts’ to stop him. “But I’m a person that has been fighting all my life. You know, so I think it’s part of my life to fight,” he stated.

Dangote said that although the fight was still on , he was very sure he would end up winning “Because the population and the government will be on our side”.

He pointed out that Africa must produce what it consumes, noting that  there’s currently no support coming from the West to the continent.

“As a matter of fact during the COVID period, some of the international banks really were looking forward to making sure that they push us into default of our loans so that the project will just be dead. And that didn’t happen with the help of banks like Afreximbank,” he added.

He also disclosed that 25 per cent of the Dangote fertiliser currently goes to  the US, stressing that it can also fully satisfy the needs of the Caribbean countries in terms of urea.

He added that currently, Nigeria does not have a strategic oil reserves, describing that situation as dangerous, but said with the Dangote refinery, the country can now be assured of one.

“So, we are not living from hand to mouth anymore. And the country doesn’t have strategic reserves in terms of petrol, which is very dangerous. It is. But in our own plant now, when you came, we had only 4.78 billion litres of various tankage capacity. But right now we’re adding another 600 million.

“So effectively, as we go forward, the refinery will be the strategic reserve of the country in terms of petroleum products,” he stated, adding that the refinery will produce and export the best quality of products.

 He stated that before now, Nigeria was importing dirty fuels which had health implications like cancer, caused by the bad fuels.

Reiterating that the Dangote Group was targeting a revenue in excess of $30 billion, Dangote stated that he intends to move into the steel business soon. ”We want to make sure every single steel that we use will come from Nigeria,’’ he said.

“What I keep telling people is that, look, we as Africans, please, don’t be deceived, no foreigner can come and make your continent great. It must be the domestic investors. Because domestic investment is what actually attracts foreign investment,” he noted.

He stressed that the Dangote Group currently produces about 1,500 megawatts of power for self-consumption, without going to the national grid, which would have impacted it negatively.

Emmanuel Addeh

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