The Independent Uganda: You get the Truth we Pay the Price
The oil firm borrowed $5.5 billion and has since paid interest and some principal of over $2.4 billion
ANALYSIS | ISAAC KHISA & AGENCIES | Global and local oil mafias, alongside international banking interests, attempted to thwart the establishment of a major oil refinery in Nigeria, according to Nigerian industrialists, Aliko Dangote.
Dangote, who made these revelations during an interview on June 14 with CNN’s Eleni Giokas at the Afreximbank Annual General Meeting in Nassau, The Bahamas, said he initially didn’t realize that oil mafia was more formidable than the drug mafia until he began constructing the refinery. The 650,000 bpd Dangote Refinery is located in the heart of Lekki, in Lagos, Nigeria.
“They tried all sorts. But you know, like what I told you in our interview. I told you that I’m a person that has been fighting all my life. So, I think it’s part of my life to fight,” the chairperson and CEO of Dangote Group of Companies, said during the Q&A at the Afreximbank AGM.
Explaining the resistance from various quarters including western and international financial interests against building the refinery, Dangote said, “I think the luck that I had by getting the refinery done is because people believed that we were crazy. It would never happen.
So, I think the people who were sort of sabotaging us, they were less concerned because they knew that these guys have entered into something that they were not going to be able to finish. So, they didn’t really bother much. They thought we were going to fail, so I must really thank a lot of our bankers for not panicking.”
He emphasized the critical role of Afreximbank, saying, “The issue is, and I must state this not because President Oramah is here, that this refinery wouldn’t have been possible without Afreximbank. I think he is one person that has so much belief in the refinery himself, and then the other gentleman is late now, Herbert Wigwe of Access Bank. But President Oramah, he is actually more convinced than some of my staff. He’s more convinced because when we took him there, both him and some of his board members became so convinced that this was the right way to go.”
Benedict Oramah is the president of Afreximbank. “I must honestly tell you, which I told you in the interview even though I didn’t see that part (in the earlier interview), I said that without the likes of Afreximbank, African Finance Corporation, it would be very difficult for us to industrialize because you need to go to banks that understand your language, understand your issues, your programs. Forget about all the other banks. All the other banks only come in for taking us to the market, raising bonds, raising whatever. And a lot of them, especially during Covid, believed that we were going to stop somewhere. The Covid would’ve stopped us from constructing the refinery. They all left but now they’re coming back when they see the food has been cooked. The food is cooked, it’s on the table.”
Saudi Arabia interests
Dangote also recounted how Saudi oil interests tried to discourage him. “To tell you the truth, I learnt a lot because I know that four years ago I was in Saudi Arabia during the fasting time and I was invited for the Iftar dinner, which is breaking of the fast, and Dr. Farley, who used to be the minister of energy, invited me to just come and break the fast with him. I went there. He just said, ‘Aliko, I heard that you’re planning on building a refinery. What capacity?’ I said 650,000. He kept quiet for a while and said, ‘But my advice to you is not to do it because normally refineries are built by major corporations or sovereign countries.’ I said, ‘Your Excellency, but unfortunately, we have already started, so I’m not really looking for advice.’ That was really how we continued. But to tell you the truth, it was very, very scary.”
On raising the funds to complete the refinery, Dangote said he borrowed $5.5 billion but encountered obstacles from international banks.
“When you look at it, when we were building the refinery, first of all, we knew that if we had gone with the idea of doing a project financing, the international banks would have shut it down. Shut it down in the sense that maybe they might have asked me for my great grandmother’s certificate of birth, which I don’t think I will be able to find anywhere. So, what we did was to borrow the money based on our own balance sheet. And you know, at that time, the naira was very strong and that was how we went through. So, we got the money, borrowed the money based on our own balance sheet.”
“We borrowed $5.5 billion. But I know we paid also a lot of interest as we went along because the project was delayed due to lack of land and the sand filling. It took a long time. Almost six years or so we didn’t do anything. So, it was actually five years. It was actually in 2018 we started. We have borrowed that much and we have actually paid interest and some principal of over $2.4 billion. Yes, we have done very well. We now have only about $2.7 billion left to be paid, so we have done very well for a project of that magnitude.”
On his experience in constructing a refinery, he said, “People don’t really understand what we undertook to build the refinery. In fact, we didn’t know what we were getting into. If we knew, we would have run away. We wouldn’t have tried it. It was very, very, very tough.
The only other countries refining crude oil on the African continent are; Egypt, Libya and Algeria. On a positive note, Africa’s richest man added, “We will end up winning because the population and the government will be on our side because what we are doing is right.”
