June 13, 2024

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Africa’s richest man under pressure as giant refinery nears production

2 min read

If all goes to plan, Aliko Dangote, Nigeria’s most successful businessman and the richest person in Africa, is about to bring online a $20bn oil refinery outside Lagos that could transform the continent’s biggest economy.

Starting operations at the vast facility would mark the culmination of a career in which Dangote, whose personal wealth is estimated by Forbes at $10.5bn, has built a fortune through salt, flour, sugar and, most significantly, cement.

Provided his Dangote Group can secure sufficient crude oil and the long-delayed plant works as it is supposed to — neither of which is a given — the refinery could start churning out diesel, kerosene and jet fuel as soon as next month.

“We’re starting with 350,000 barrels a day,” Dangote told the Financial Times, adding that a deal had already been clinched for the “first cargo of about 6mn barrels” for delivery next month.

Dangote, 66, said he believed the refinery could reach its capacity of 650,000 barrels a day by the end of 2024, although the IMF has said it doubts it will reach more than a third of that by 2025.

At full tilt, the refinery, the world’s largest “single train” facility with just one distillation unit, could save Nigeria billions in foreign exchange currently spent on imported fuel. It was “shameful”, Dangote said, that Nigeria, a major oil producer for more than 50 years, could not refine its own crude in anything like sufficient quantity.

Amaka Anku, head of the Africa practice at political risk consultancy the Eurasia Group, said the refinery was “a massive, complicated undertaking”. In a country where most businesspeople looked for short-term profits, she added, it was a blessing “that we have someone like Dangote who is willing to spend billions of his own money on long-term projects”.

Some observers doubt the Dangote refinery will work at all, or predict that it will be inefficient © Tom Saater/Bloomberg

Dangote conceded there were times when he thought…

2023-11-25 08:00:54

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