Aliko Dangote, Africa’s richest man, has seen his wealth more than double to $28 billion following the long-awaited opening of his Nigerian oil refinery, according to the Bloomberg Billionaires Index.
The refinery is the world’s largest single-train facility, capable of processing a broad range of global crude types. It represents a monumental investment for Dangote, who has financed the $20 billion project largely through his own fortune.
The 67-year-old Nigerian industrialist now presides over one of Africa’s most ambitious private ventures, a refinery that promises to alter Nigeria’s energy landscape. By producing refined petroleum products domestically, the facility could eliminate the country’s dependence on fuel imports, a reliance that has hamstrung its economy despite Nigeria being Africa’s largest crude oil producer.
Yet Dangote, whose primary fortune was built on cement, is quick to acknowledge the challenges. “I didn’t know what we were building was a monster,” he said in a recent interview, reflecting on the complexity of the project and the obstacles it has faced, including opposition from local communities and environmental concerns.
What we know
The project’s completion took over 11 years—far longer than initially planned—and cost more than three times its original budget.
Delays, regulatory hurdles, and the unexpected impact of the Covid-19 pandemic all contributed to the prolonged timeline. Dangote’s group also had to secure a $5.5 billion loan from local banks, adding to financial pressures during construction.
Some context
Despite its scale, the refinery’s inauguration has not been without difficulties. Although the facility was expected to process Nigeria’s crude, much of the country’s oil output is locked into long-term export agreements, forcing Dangote’s refinery to initially source crude from abroad.
Additionally, the project has faced challenges negotiating favorable terms with the Nigerian National Petroleum Corporation (NNPC), particularly regarding crude supply, pricing, and foreign exchange rates—key factors affecting the refinery’s profitability.
Relations between Dangote and Nigeria’s government, traditionally close, have become more strained under President Bola Tinubu’s administration.
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In January, the Economic and Financial Crimes Commission raided Dangote Group’s offices as part of a broader investigation into foreign exchange dealings, which the company called an “unwarranted embarrassment.”
While no allegations have been brought against Dangote personally, the incident shows the cooling relationship between the billionaire and the current administration.
What Nigeria stands to gain
For Nigeria, the potential economic benefits are significant. The country could save billions in foreign exchange costs by reducing fuel imports, while generating substantial export revenues. The refinery is also expected to create thousands of jobs and stimulate industrial growth in the Lagos region.
However, challenges remain. Nigeria’s volatile currency, high operating costs, and entrenched fuel subsidy programs pose risks to the refinery’s profitability. The Dangote Group has already faced pushback from local communities affected by the refinery’s construction, many of whom are still awaiting full compensation for relocations. Environmental concerns have also emerged, with critics pointing to the refinery’s potential impact on the local ecosystem.
Despite these challenges, Dangote remains resolute, noting that his investment in the refinery was never just about profits. “It’s an industry full of games, but I wanted to build something that will truly transform Nigeria,” he said.
With the refinery now operational, all eyes are on whether it can deliver on its promises and significantly alter the dynamics of Nigeria’s oil sector.
