Dangote now worth $28bn after refinery project – Report

The Chairman of the Dangote Group, Aliko Dangote, is now richer than ever after the completion of his $20bn refinery, a report by Bloomberg has disclosed.

Located in Lekki, Lagos, the Dangote refinery is the biggest single-train oil refinery in the world and one of the most complex, capable of processing most global crude types.

At its 650,000 capacity, the refinery has the potential to transform Nigeria’s economy by making the country self-reliant on fuel.

According to the Bloomberg Billionaires Index, the refinery has doubled Dangote’s net worth to 27.8bn.

“And it’s more than doubled his net worth to $27.8bn, according to the Bloomberg Billionaires Index,” the report said of the refinery.

It could be recalled that Dangote’s net worth was around $13bn as of the first quarter of 2024.

While speaking earlier about his refinery, Africa’s richest man (Dangote) said he did not know that the mafia in oil is stronger than the mafia in drugs.

He said he wouldn’t wish the experience on his worst enemy.

“I didn’t know what we were building was a monster. The pressure was coming from different directions, people confusing us, disturbing us every day with different media stories that it will never work, it will never work, it will never work,” 67-year-old said during a recent visit to New York.

Since the refinery started running in January, there have been disagreements with the government and the Nigerian National Petroleum Company Limited, as well as concerns over its impact on locals and the environment.

Bloomberg notes that Dangote is smarting from the blowback, his tone quickly shifting from warm to bitter as he runs through the challenges.

For Dangote, who made his first billions in cement, the refinery was the most audacious undertaking of his 46-year career.

Building it, he said, took 11 years and $20bn, three-and-a-half times as long and more than twice as much as initially planned.

The bedrock of Dangote’s empire is commodities: mainly cement but also sugar, salt, and flour.

“Dangote’s critics call him a politically connected monopolist, but he’s proud of his role in building Nigeria’s manufacturing sector. Before he went into business, Nigeria imported most of its cement — a literal building block of developing markets. Now it’s a net exporter of the substance. With the refinery, he saw an opportunity to do the same for the country’s oil industry,” the report expatiates.

Dangote said he was paying $50m to $60m a year in interest for a $5.5bn loan he’d acquired from a consortium of local banks.

It was noted that maintaining wealth of any level has become substantially harder in Nigeria of late, with the naira losing more than two-thirds of its value against the dollar following President Bola Tinubu’s relaxing of foreign exchange restrictions

Dangote boasts that 80 per cent of his business is dollarised.

Next year, he said, the Dangote Group will be the biggest supplier of dollars to Nigeria, whose economic woes have been exacerbated by a shortage of the US currency.

“Our strategy is whatever we do, we generate as much foreign exchange as possible. That will shield us from the issues of currency devaluation in Africa,” he said.

Meanwhile, it was gathered on Thursday that the Dangote refinery has to vacate its agreement with the Nigerian National Petroleum Company before commencing the direct sale of petrol to oil marketers.

Our correspondent learnt that this becomes necessary to allow the refinery to open another contract agreement with both major and independent marketers for the purchase of petrol.

Since the refinery commenced the sale of petrol a month ago, the NNPC has remained the sole off-taker of the product.

A source informed our correspondent that the arrangement that the NNPC should be the sole buyer of Dangote PMS was as planned by the Federal Government.

However, the Federal Government implementation committee for the naira-crude sale initiative led by the Minister of Finance, Wale Edun, declared the market open last week Friday, saying marketers could now purchase PMS directly from Dangote without recourse to the NNPC.

Since the declaration, marketers said they have started making arrangements to meet with officials of the refinery on how to start lifting fuel.

The PUNCH recalls that the Vice President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, led other officials of the association to a meeting with the Vice President of the Dangote Industries, Devakumar Edwin, in Lagos.

Though Fashola did not give much updates about the meeting with Edwin, he appreciated him for the roles he had been playing.

“He received us very well and promised to make things easier for IPMAN to do business with Dangote,” he said.

Fashola added, “We had a fruitful discussion with the group. We have started discussing modalities and other logistics. IPMAN has agreed to work with Dangote. We hope very soon we will start lifting products from the facility.”

Our correspondent gathered that the meeting with IPMAN was supposed to resume on Thursday but it did not.

Findings by our correspondent confirmed that the Dangote refinery has told all marketers that it would not be able to sign another contract with them yet unless the purchase agreement between it and the state-owned oil company is vacated.