Africa’s richest man and Nigerian business mongul Alhaji Aliko Dangote, said on Wednesday that he has secured loans worth N671.5 billion ($4.25b) from banks to build an oil refinery to help the country reduce fuel imports.
Dangote who spoke on the side lines at the on-going World Economic Forum on Africa in Cape Town South Africa, said the loan was secured from “two offshore banks and some Nigerian banks.”
Nigeria, a member of the Organization of the Petroleum Exporting Countries, (OPEC) imports about 70 per cent of the oil products it needs to meet domestic requirements.
The nation’s four refineries process less than the 445,000 barrels a day of capacity owing to aging infrastructure and poor maintenance.
The country exports about four times that volume in crude oil.
The businessman had announced in April, plans to invest up to $8 billion to build a Nigerian oil refinery with a capacity of around 400,000 barrels a day by late 2016.
Dangote Group, owner of the company with Nigeria’s biggest market value, was said to be seeking a $3.5 billion loan to fund projects including an oil refinery
“We need constant funding from one successful project to another, a very good funding mechanism,” Vice President Sani Dangote said recently in an interview from the capital, Abuja. “The loan will be for the refinery and other projects.”
Nigeria, Africa’s top oil producer, relies on fuel imports to meet more than 70 percent of domestic needs, according to the Petroleum Ministry. Four state refineries with a combined daily capacity of 445,000 barrels of oil are operating at a fraction of that because of poor maintenance and aging equipment.
Dangote plans to build a refinery in Nigeria’s southwest with a capacity of 400,000 barrels of crude oil a day, he said.
“It’s going to take a while,” the vice president said by phone. “We’re still looking at the supply chain.”
The group owns Dangote Cement Plc (DANGCEM), the country’s biggest company by market value, Dangote Sugar Refinery Plc (DANGSUGA), Dangote Industries Ltd. and Dangote Oil Services Limited.
The Dangote group had listed the shares of its cement subsidiary, Dangote Cement, on the Nigerian Stock Exchange (NSE), which caused a major shakeup of the capital market in the country and affected its shape and character in ways not seen for several years.
Dangote Cement, one of Africa’s biggest cement projects designed by Aliko Dangote, the group’s president and chief executive officer, aimed to make the continent self sufficient in cement, a commodity in high demand for various construction purposes, especially residential and commercial housing which are widely believed to be grossly deficient across much of Africa.
It has operations in Nigeria, Benin, Ghana, Senegal, South Africa and Zambia. But the initial listing will cover cement assets in Nigerian only.
Dangote made history two years ago with the listing of its Cement company with a valuation of N2.13 trillion which instantly raised total market capitalisation of the NSE to about N8 trillion, as the company contributed 25 percent of that amount.
The shares was listed at N35 per unit. At N2.13 trillion, the valutation of Dangote cement is about the combined total market capitalisation of all listed banks.