Dangote Says He Would Have Walked Away From His $20 Billion Refinery Had He Known What It Would Take to Build It

Brave Admin
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Nigeria’s Billionaire, Aliko Dangote, has revealed that the sheer scale of what he was attempting to build nearly stopped him before he started; and that it was only by confronting the project one step at a time, rather than all at once, that Africa’s richest man managed to deliver what is now the largest oil refinery ever constructed.

“Luckily for us, we didn’t know what we were building. Because if I was faced with the plan and the drawings all at once, I wouldn’t have built this refinery. I would have chickened out,” Dangote said in a candid interview with local media, comparing the experience to swimming across an ocean only to discover midway that the tide was against you in both directions.

The Dangote Refinery, which sits outside Lagos, cost $20 billion to build; 50 percent larger by capacity than any refinery previously constructed anywhere in the world. Dangote said the decision to go that big was deliberate and defiant.

“I decided that I am going to make a refinery. And let us make the biggest. The biggest ever. In the world.”

The project, launched in 2013, ran into immediate and sustained obstruction.

Dangote said securing the land alone consumed five years; three and a half years for one parcel and one and a half for another; with access to the second plot blocked entirely for much of that period.

He attributed the delays to what he described plainly as the oil mafia; entrenched interests in Nigeria’s petroleum industry determined to prevent a domestic player from disrupting their control of the market.

“All this was being blocked by what you call the mafia in oil business. To make sure that we don’t come and address these issues. But we were not deterred at all.”

The financial environment made an already daunting undertaking considerably worse. When the project began, the naira traded at 156 to the dollar.

By the time the refinery was completed, that rate had collapsed to nearly 1,900; a devaluation that dramatically inflated the cost of a project importing billions of dollars worth of equipment from overseas.

Dangote said the currency crisis forced him to turn to external lenders including Afreximbank, the African Finance Corporation, Zenith Bank, Access Bank, UBA, Standard Bank of South Africa and Standard Chartered Bank of the United Kingdom to supplement funds that had originally been expected to come largely from within his own business empire.

The infrastructure requirements alone would have constituted a major national project in most countries. Because no existing port in Nigeria could handle the equipment being shipped in; some individual pieces weighing as much as 3,000 tons; Dangote built his own.

He also built roads and constructed a water treatment facility covering more than 30 hectares, capable of supplying 440 million litres of treated water; a volume that would serve a sizeable city.

At its peak, 67,000 people were working on the construction simultaneously; a workforce Dangote noted was larger than the entire population of the town where he grew up.

The refinery is now operational, and Dangote said the results have exceeded what even he had imagined when he took the first step into what would become a 12-year ordeal.

“When we finished the refinery, things have turned out to be much more than our own expectations.”

For a continent that has long exported its crude oil only to import it back as refined fuel at enormous cost, the implications of a fully operational Dangote Refinery extend well beyond one man’s ambition.

Whether it reshapes Nigeria’s fuel economy and Africa’s energy independence as its builder intends remains to be seen; but the scale of what has been built leaves little doubt that the attempt, at least, is serious.

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