Report Suggests Africa's Richest Man, Dangote Will Need to Borrow N456.7bn to Complete his Refinery Project

Report Suggests Africa's Richest Man, Dangote Will Need to Borrow N456.7bn to Complete his Refinery Project

  • Fitch, a credit rating firm, has stated that Aliko Dangote will need to borrow to complete his refinery project by 2023
  • While it expects the project to be completed, the agency claims Dangote might have to use his cement company to raise funds
  • By 2026, the Dangote refinery hopes to make Nigeria a net exporter of refined petroleum products and petrochemicals

Fitch, a credit agency in a new report has alleged that Africa's Richest man, Aliko Dangote will need to borrow again to complete its ongoing refinery project by 2022.

Aliko Dangote early in 2022 promised to commission the $19 billion refinery project before President Muhammadu Buhari’s tenure ends next year, which the credit agency does not see visible.

President Buhari's administration is expected to end on May 29th 2023, but fitch believes the oil refinery will start production in the second half of 2023.

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Aliko Dangote, Refinery Project
Work is progressing on Aliko Dangote Credit: Tom Saater/Bloomberg via Getty Images
Source: Getty Images

The credit agency is alleging that the timely completion or lack of the project will be based on raising enough funds as Dangote does not have the kind of money needed to complete his refinery by 2023, Businessinsider captured.

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It stressed that Aliko Dangote has invested all his cash and even borrowed to finance the refinery project alleging that the additional $1.1 billion (N546.7 billion) will have to be borrowed.

Details of the report

Part of the Fitch report reads:

“Funding for the completion of the refinery project is expected to be partly covered by proceeds of the new bond. If the transaction is not successful, or should completion costs overrun or market conditions in the cement or urea sector deteriorate materially, we do not believe that DIL's existing creditors would have further lending capacity. We believe that further asset sales, either in cement or stakes in the projects, would be the more likely options to address funding of the refinery.”

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More concerns were raised in the report

Fitch in its report also raised concern about the corporate governance of Dangote Industries Limited.

It says that the existence of a “complex group structure with a large number of related-party transactions” has “a negative effect on operational and financial transparency.”

It added:

“DIL has a complex group structure with a large amount of related-party transactions, with a negative effect on operational and financial transparency. We also view the dominance of Aliko Dangote, as CEO and the main shareholder, in operations as an additional risk.”

It is not all gloom for Dangote

Fitch concluded its report by saying that the refinery project is expected to sustain strong margins and yield solid cash generation, adding diversification to DIL's profile and allowing rapid deleveraging.

It said:

“Once operational, we expect this project to contribute around USD1 billion to EBITDA annually when ramped up from 2024."

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Billionaires line up to buy Chelsea FC after Abramovich's ouster

Recall that has reported that the beleaguered Chelsea Football Club is set to have new suitors, this time the owners of Chicago Cubs and Ken Griffin, a billionaire and hedge fund tycoon.

According to Sky News, the Ricketts family and Griffin have created an investment group that will present a reasonable offer for the European Champions on Friday, March 19, 2022.

This will be announced on Wednesday and will present a formidable competitor to other bidders as Roman Abramovich hands-off Chelsea after 19 years as owner of the club.


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