Aliko Dangote, recognised as Africa’s wealthiest individual, is in the process of raising a substantial amount of capital to enhance crude oil supplies for his $20 billion oil refinery located in Lagos, according to a report by the Financial Times (FT) on Sunday.
Gatekeepers News reports that Dangote is actively engaged in discussions with various stakeholders, including commercial lenders, development banks, oil traders, and other entities within the industry, to secure funding for crude oil supplies that will be refined into marketable products.
The Africa Finance Corporation (AFC), a prominent pan-African development lender based in Nigeria and an existing investor in the refinery project, is among the institutions participating in these fundraising discussions.
In December 2023, the AFC played a key role in a financing round aimed at generating the initial capital required to initiate operations at the refinery.
According to sources familiar with the situation, it is estimated that the Dangote refinery will require approximately $2 billion every 90 days to ensure a minimum supply of 300,000 barrels of crude oil per day.
Concerns have been raised by investors regarding Dangote’s challenges in securing a reliable supply of crude oil. Additionally, potential financiers are apprehensive about the risks associated with Nigeria’s currency, the naira, which has experienced significant decline following two rounds of devaluation within the past year.
“The refinery may never make a profit in real terms,” the second banker told FT.
“It was built over-budget and the naira, which is a major currency of future revenue, has devalued massively.”
According to FT, Africa’s richest man needs to secure more crude to reach the refinery’s capacity of 650,000 barrels per day for a project he has said is a “game changer” for the country.
The report said the billionaire, in October, said he expected the refinery to be at capacity by the second quarter (Q2) of 2025, although previous targets have often slipped.
“Dangote added that Nigeria’s biggest infrastructure project in decades and the largest of its kind in the world is already producing 420,000 b/d,” the report said.
“He wants to resolve what he describes as an ‘absurd’ situation in which Africa’s biggest oil producer imported all of its refined petroleum products because of a lack of refining capacity.”
Devakumar Edwin, a senior executive at the group, also told Financial Times that in July, the refinery bought crude from the United States and Brazil, and was in talks with African suppliers such as Libya and Angola.
