Aliko Dangote reveals $2.4 billion loan repayment for landmark refinery project

By Innocent Raphael 

Aliko Dangote, the founder of the Dangote Group, has revealed that he has repaid approximately $2.4 billion of the $5.5 billion borrowed to construct his $19 billion refinery near Lagos. 

Speaking at the Afreximbank Annual Meetings (AAN) and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas, Dangote highlighted the challenges faced, including sabotage attempts from various entities.

Dangote expressed gratitude to Afreximbank and Nigeria’s Access Bank for their support, emphasizing that without institutions like the African Finance Corporation (AFC) and others, industrializing Africa would be difficult due to the unique financial challenges on the continent. 

He criticized foreign banks for their lack of interest in aiding Africa’s growth, revealing that some had attempted to push his company into loan default during the COVID-19 pandemic.

“We borrowed just over $5.5 billion based on our own balance sheet,” Dangote stated. Despite delays due to land acquisition issues and extensive sand-filling, he reported significant progress, with $2.4 billion repaid and $2.7 billion remaining. 

Addressing concerns about receiving sufficient crude oil for the refinery, Dangote acknowledged resistance from those who had long benefited from the status quo. 

“In a system where for 35 years people are used to counting good money…you don’t expect them to pray for you. Of course, you expect them to fight back,” he said, adding that the refinery is essential for the region and the continent despite these challenges.

Dangote described the opposition he faced as more intense than expected. “I knew there would be a fight, but I didn’t know that the mafia in oil are stronger than the mafia in drugs. It’s a fact,” he remarked, highlighting persistent sabotage efforts from local and foreign entities.

Despite ongoing struggles, Dangote remains confident of ultimate success, asserting that public and governmental support will prevail. He stressed the importance of Africa producing what it consumes and criticized the lack of Western support. 

He noted that during the COVID-19 period, some international banks aimed to force a default on their loans to halt the project, but Afreximbank’s support thwarted these efforts.

Dangote also revealed that 25% of Dangote fertilizer is exported to the US, with the potential to meet the Caribbean’s urea needs. 

He emphasized the refinery’s role in establishing Nigeria’s strategic oil reserves, enhancing the country’s energy security with a storage capacity currently at 4.78 billion litres, soon to increase by another 600 million litres.

The refinery aims to produce and export high-quality fuels, eliminating the health risks associated with Nigeria’s previous imports of substandard fuels. With a revenue target exceeding $30 billion, Dangote plans to venture into steel production, aiming for Nigeria’s self-sufficiency in steel.

Dangote concluded by urging African domestic investors to lead the continent’s development, as their investments are crucial in attracting foreign investment. 

He further highlighted that the Dangote Group generates about 1,500 megawatts of power for its operations, avoiding reliance on the national grid, which would otherwise be strained.

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