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If all goes to plan, Aliko Dangote, Nigeria’s most profitable businessman and the richest particular person in Africa, is about to convey on-line a $20bn oil refinery exterior Lagos that might remodel the continent’s largest economic system.
Beginning operations on the huge facility would mark the end result of a profession during which Dangote, whose private wealth is estimated by Forbes at $10.5bn, has constructed a fortune by way of salt, flour, sugar and, most importantly, cement.
Supplied his Dangote Group can safe enough crude oil and the long-delayed plant works as it’s presupposed to — neither of which is a given — the refinery may begin churning out diesel, kerosene and jet gas as quickly as subsequent month.
“We’re beginning with 350,000 barrels a day,” Dangote advised the Monetary Instances, including {that a} deal had already been clinched for the “first cargo of about 6mn barrels” for supply subsequent month.
Dangote, 66, mentioned he believed the refinery may attain its capability of 650,000 barrels a day by the top of 2024, though the IMF has mentioned it doubts it would attain greater than a 3rd of that by 2025.
At full tilt, the refinery, the world’s largest “single practice” facility with only one distillation unit, may save Nigeria billions in international alternate at the moment spent on imported gas. It was “shameful”, Dangote mentioned, that Nigeria, a significant oil producer for greater than 50 years, couldn’t refine its personal crude in something like enough amount.
Amaka Anku, head of the Africa follow at political threat consultancy the Eurasia Group, mentioned the refinery was “an enormous, sophisticated enterprise”. In a rustic the place most businesspeople regarded for short-term income, she added, it was a blessing “that now we have somebody like Dangote who’s prepared to spend billions of his personal cash on long-term initiatives”.
Dangote conceded there have been instances when he thought the huge mission — lengthy delayed and about $8bn over finances — would possibly jeopardise his enterprise empire.
“The challenges that we confronted, I don’t know whether or not different folks can face these challenges and even survive,” he mentioned. “It’s both we sink or we sail by way of. And we thank Almighty that at the least we’ve arrived on the vacation spot.”
But in what is meant to be Dangote’s second of triumph, he finds himself below intense strain. A rival industrialist has accused him of underhand enterprise practices and of gaining unfair entry to international alternate from a central financial institution whose former governor is now being investigated by the authorities. Dangote has denied each allegations.
As well as, the Nigerian Nationwide Petroleum Company has been unable or unwilling to provide him with the crude his refinery wants, though Dangote insists it is just a matter of weeks earlier than oil begins flowing.
Just a few even doubt the refinery will work in any respect, or predict that it will likely be inefficient. Rumours are additionally rife that Dangote, whom critics accuse of getting unduly benefited from shut relations with 4 successive administrations, has fallen out with Bola Tinubu, who grew to become president in Could.
“Dangote isn’t as influential as he was,” mentioned Ricardo Soares de Oliveira, an Oxford professor of the politics of Africa, who described the billionaire as a Nigerian oligarch. At a time when he had wager his fortune on the success of the refinery, that was not a cushty place to be in, a number of shut observers of Nigeria mentioned.
“That is the primary time the elected authorities isn’t significantly aligned with Aliko,” mentioned one senior banker who spoke on situation of anonymity. “So it has opened a window of alternative for folks to hawk their very own affect.”
For a lot of Nigerians, the billionaire industrialist has finished greater than anybody to spend money on the nation and create jobs. “We’d like 10 Dangotes,” mentioned Anku.
However for others he’s a ruthless monopolist who is determined by the federal government to guard him from competitors and to cut back his tax invoice by giving his enterprise so-called pioneer standing.
“The Romans found out the way to make cement 2,000 years in the past,” mentioned Feyi Fawehinmi, a Nigerian creator dwelling in London. “And but Nigeria is making billionaires out of it.”
Within the interview, Dangote complained that rivals have been carping as a result of they didn’t perceive what it took to run a enterprise that was the nation’s largest private-sector employer and its largest taxpayer. “Generally when folks speak about us, Dangote, it’s like the federal government is holding all people down and permitting us alone to fly.”
He didn’t need to focus on intimately a tussle over the provision of crude with NNPC, which owns 20 per cent of the refinery after a $2.76bn fairness buy in 2021. Nigeria produces about 1.4mn barrels of oil a day, nicely wanting its Opec quota of 1.8mn barrels, with a lot pre-sold in ahead contracts.
“Let’s not have the blame recreation right here,” he mentioned of NNPC’s reported difficulties in assembly the refinery’s necessities. “Now we have resolved all the problems of provide.”
Dangote rejected strategies NNPC was enjoying hardball to barter an even bigger share of the refinery, which he mentioned would generate income of $25bn a 12 months at full capability. “I don’t suppose NNPC wants to purchase extra shares. I believe they’re OK with what we’ve given them.”
The refinery would finally be floated as a separate firm, he mentioned, initially on the Lagos inventory alternate.
To construct the huge mission on 2,500 hectares of swampland exterior Lagos, Dangote needed to assemble his personal port and highway to take supply of heavy tools, set up his personal trucking firm to maneuver it and his personal industrial welding facility to place it collectively. He mentioned he had laid sufficient cable to stretch twice across the globe and had moved 65mn tonnes of sand. “You’ll not see this sort of mission in Nigeria within the subsequent 20 years.”
No exterior contractor had been prepared to tackle Nigerian threat, he mentioned, so he needed to design and construct the entire thing in-house. “We didn’t minimize prices. We didn’t minimize corners,” he mentioned. “We didn’t do it for folks to clap us. We did it for posterity.”
Nonetheless, some have chosen this second to snipe. Dangote has accused BUA Group, Nigeria’s second-biggest cement producer, led by founder and chair Abdul Samad Rabiu, of sponsoring assaults on his firm within the Nigerian press. Rabiu is price $6.5bn, based on Forbes.
Tales allegedly floated by BUA Group have accused Dangote of making the most of unlawful international alternate trades price billions of {dollars}. The federal government is investigating foreign exchange allocations made when Godwin Emefiele, the previous central financial institution governor, was in command of distributing {dollars} on the official charge to chosen industries at far beneath market costs.
BUA Group responded to the claims by accusing Dangote of making an attempt to sabotage the enterprise for greater than 30 years, together with as soon as allegedly issuing the corporate with a dud cheque. Rabiu declined to remark.
The 2 are combating in courtroom over an alleged try by Dangote to stop Rabiu’s firm mining limestone in Edo state. In a prolonged assertion revealed in native newspapers, Dangote accused BUA Group of rehashing discredited tales and mentioned he may account for each greenback of international alternate.
Matthew Web page, a former CIA skilled on Nigeria, mentioned Rabiu donated closely to the Tinubu election marketing campaign and had been emboldened by his shut relationship with the brand new president. The cement market was smaller after eight years of financial stagnation, he mentioned.
“The tide pool has shrunk and the 2 largest lobsters within the tank are snapping at one another.”
Dangote wouldn’t be drawn on his struggle with Rabiu or his relationship with the president. However he mentioned nothing ought to distract from the refinery — a “nationwide mission” that was “larger than Dangote”.
After years of guarantees, he was adamant that every part was prepared. “The refinery is completed,” he mentioned. “The child can come out at any time.”
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