Aliko Dangote has revealed that he secured only $2.7 billion in loans from the Central Bank of Nigeria (CBN) for the Dangote Refinery, amid growing insinuation that the ambitious project may have played a role in exacerbating Nigeria’s current foreign exchange (forex) crisis.
As the country navigates through economic turbulence marked by a significant forex scarcity, the Dangote Refinery, a landmark infrastructure initiative, has found itself at the center of a heated debate about its impact on the nation’s financial stability.
Nigeria, Africa’s fourth-largest economy, has been grappling with a severe shortage of foreign exchange, a problem that has been attributed to several factors including declining oil revenues, reduced foreign investment, and a high demand for dollars to support imports. Against this backdrop, critics have pointed fingers at the Dangote Refinery’s substantial forex requirements as a potential drain on the country’s already stressed reserves.
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In an attempt to address these concerns, Aliko Dangote, the billionaire industrialist behind the refinery, issued a detailed statement clarifying the financial structure of the project. According to him, the $2.7 billion obtained from the CBN over a decade was a modest portion of the total investment required for the refinery.
He explained that the project was primarily funded through the company’s own resources, with the CBN’s contribution being relatively minimal in the broader scheme.
“On the loan that we got, part of the loan was taken by Dangote Industries, which is a local company. Dangote Industries got allocation from Central Bank and the total allocation that we got, including the money that we lost in terms of interest, was about $2.7 billion from 2013 to 2023.
“Out of the $2.7 billion we still have more than $200 million of forwards that we’re yet to collect from the CBN. So, it’s the total of $2.5 billion we got from the CBN in real cash which was paid in terms of interest and principal payment,” he said.
Dangote’s statement seemed aimed at dispelling the growing narrative that his refinery project has been a significant burden on Nigeria’s forex reserves.
He further clarified that the funds received from the CBN would eventually be reinvested into the Nigerian economy through dividends and other financial returns once the refinery begins to generate profits.
“Dangote Industries as soon as they get their dividends are bringing that money back to sell in the local market. They’re bringing that money back into Nigeria.
“There’s no money we’ve taken away from Nigeria. And the one that we took, we’ll return it. So it’s better for people to understand.
“It’s better for people to understand that what we took from CBN, we’re bringing it back. The thinking of people is that the majority of the Central Bank’s money was depleted by the Dangote’s major projects. We got $2.5 billion cash from Central Bank and that money will come back as soon as we start making money. Once we start making money, we’ll start paying the loans that we have,” Dangote added.
In an earlier statement, Aliko Dangote revealed that his company has already repaid $2.5 billion of the $5.5 billion loan secured from various banks to finance the construction of the Dangote Refinery. Additionally, the former Governor of the Central Bank of Nigeria (CBN) noted that as of 2023, Dangote had repaid 70% of the loan obtained from the apex bank.
Dangote recent clarifications on the refinery are deemed necessary given the recent spat between him and the Nigerian government regarding his refinery.
The Dangote Refinery, once fully operational, promises to be a game-changer for Nigeria. It is expected to significantly reduce the country’s dependence on imported refined petroleum products, conserving foreign exchange that would otherwise be spent on imports.
While the refinery’s long-term benefits for Nigeria’s economy are widely acknowledged, its role in the current forex crisis has become a subject that refuses to go away. Dangote’s clarifications aim to reassure both the public and financial stakeholders that the project is not unduly straining the country’s forex resources and that the benefits, once realized, will outweigh the initial costs.