July 21, 2024
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Dangote Pays Off $2.4 Billion of Refinery Loan despite Challenges

Africa’s richest person, Aliko Dangote, has revealed that he has repaid $2.4 billion of the $5.5 billion borrowed to build his $19 billion refinery near Lagos. Speaking on Wednesday at the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in The Bahamas, Dangote shared the hurdles faced during the project.

Dangote revealed that various local and foreign entities attempted to sabotage the 650,000 barrels per day refinery. He praised Afreximbank and Nigeria’s Access Bank for their support, without which the project would have failed.

He also acknowledged the role of banks like the African Finance Corporation (AFC) in supporting Africa’s industrialization by understanding the continent’s unique challenges.

During the COVID-19 pandemic, some international banks tried to push the company into loan default, a move that could have killed the project. Dangote described the situation as scary, noting that foreign banks were not interested in helping Africa grow. “If I had raised the idea of international project financing with some of them, they would have shut it down,” he said.

“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.

Dangote highlighted difficulties in securing crude oil from International Oil Companies (IOCs), who resisted losing their lucrative positions. “Those used to counting money for 35 years won’t easily give it up,” he said, comparing the resistance to dealing with a powerful mafia. He remained optimistic, saying the refinery was essential for Nigeria and Sub-Saharan Africa.

Dangote emphasized the need for Africa to produce what it consumes, noting the lack of support from the West. He revealed that the Dangote refinery would ensure Nigeria has strategic oil reserves, reducing reliance on imported dirty fuels that cause health issues like cancer. The refinery will also produce high-quality products for export.

Looking ahead, Dangote aims to generate over $30 billion in revenue and plans to enter the steel industry. “We want to make sure every single steel we use comes from Nigeria,” he said. He stressed that domestic investment is crucial for attracting foreign investment and driving Africa’s growth.

The Dangote Group currently produces about 1,500 megawatts of power for its use, avoiding reliance on the national grid. “We are not living from hand to mouth anymore,” Dangote stated, highlighting the refinery’s role in ensuring energy security for Nigeria.

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