Dangote’s Standoff With Nigeria Intensifies, Risking Investments
Aliko Dangote, Africa’s richest man, says that diesel produced by his massive refinery is the best that’s sold in Nigeria, even as lawmakers consider a probe into the quality of fuel in the country.
Tests conducted in his 650,000 barrel-a-day refinery lab showed that it produced diesel with 87 parts per million of sulfur, while two imported varieties had tested in excess of 1,800 ppm, Dangote said in a rare briefing Saturday. The company targets 10 ppm of sulfur by the end of the month, he said, adding that the facility produces the “best diesel in Nigeria.”
Dangote spoke after giving a personal tour of the lab to several Nigerian politicians including Tajudeen Abbas, speaker of the House of Representatives, who joined him at the briefing and told reporters that lawmakers would open an investigation into the nation’s diesel quality.
Dangote has been battling with authorities on multiple fronts since the start of the year — from a raid by the anti-graft agency on his offices in January, to allegations last week that he wants an import ban on diesel. The volley of accusations prompted the billionaire to scrap a plan to invest in a new 5 million tons a year steel plant in Africa’s most-populous nation, which he had planned to start building next year.
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“To call us a monopoly is very, very unfair,” Dangote said at the briefing in Lagos, the commercial capital. The group won’t build the steel plant because it will give more ammunition to the company’s detractors, he said.
A government regulator last week claimed Dangote had requested the suspension of imports of diesel and aviation fuel in a move that would hand his refinery a monopoly on their sale in Nigeria.
The $20 billion Dangote refinery, which became operational in January, currently produces aviation fuel, naphtha and diesel. The tycoon said he paid $100 million to buy the land in the free trade zone where his refinery is currently located in Lagos.
“Building a refinery like this is supposed to be a pride for everybody,” Dangote said, arguing that it was an accomplishment that other African nations have been trying to achieve for years without success, leaving them totally reliant on imports.
The plan is for the refinery to start producing gasoline from August, which will take its output to about 550,000 barrels a day by the end of the year from about 350,000 barrels a day currently.
Dangote also denied receiving financial support from the government or preferential access to foreign exchange to build the refinery. He said his group received $2.5 billion in foreign exchange from the central bank over a period of 10-1/2 years that it took to complete the refinery. An additional $200 million in forwards is yet to be collected, he said.
“So it is wrong for people to say that Dangote’s major projects depleted the nation’s reserves,” he said.
Prior to the relaxation of foreign exchange controls in June 2023, Nigeria operated a defacto dollar peg that kept it artificially strong against the dollar with the central bank rationing dollars to selected industries at the inflated official rate. The naira has lost around 70% of its value against the greenback since the peg was abandoned.
Dangote’s assets are valued at $14.5 billion, according to Bloomberg’s Billionaires Index, making him Africa’s richest person.
