Aliko Dangote Not Scared to Build Africa’s Largest Oil Refinery

Over the past eight years, Aliko Dangote, Africa’s richest man, has taken on one of the continent’s most ambitious projects: constructing one of the world’s largest oil refineries. 

This refinery, spanning nearly 4,000 football fields, began its construction in 2016 at the Lekki Free Zone outside Lagos, Nigeria. The facility opened in May 2023, and Dangote’s company claims it will produce 650,000 barrels per day once fully operational.

Nigeria, despite being one of Africa’s largest oil producers, could not historically refine its oil, relying instead on imported fuel. 

With the opening of this refinery, Dangote Industries Ltd., a conglomerate that also operates cement plants, a fertilizer plant, and a sugar refinery aims to make Nigeria self-sufficient in petroleum products and to supply petrol, diesel, and jet fuel to other African countries.

During an interview with CNN’s Eleni Giokos, Dangote discussed the significant hurdles faced in bringing this project to life. He noted that local oil companies and producers are accustomed to exporting crude oil, presenting a challenge to supply the new refinery. 

“Nobody thought we were going to appear in this industry. So with that, we know there are challenges and that’s the truth, I have to be very open to you,” Dangote said. Despite these challenges, he praised the Nigerian National Petroleum Corporation (NNPC) for its support.

In addition to the oil refinery, Dangote has also made significant strides in the cement industry, becoming one of the largest cement producers in sub-Saharan Africa. 

Reflecting on his decision to build a cement manufacturing plant, Dangote explained, “We didn’t have much challenge because we were also the importers and there was massive demand in terms of cement. We invested our money, we risked our capital, and we made the country self-sufficient.”

Timeline for Self-Sufficiency

When asked about the timeline for Nigeria achieving self-sufficiency in oil production and refining, Dangote expressed confidence. 

“By June or so, we should be able to fully meet Nigeria’s demand and then because we’re ramping up already, we’re a little bit over 420,000 barrels per day already. So, as we go along, ramping up, I believe by July/August we should be at almost 550,000 barrels per day. Then maybe before the end of the year we’ll be at about 650,000.”

Aliko Dangote on the AfCFTA challenges and opportunities

Aliko Dangote, Africa’s richest man, has been a vocal advocate for the African Continental Free Trade Area (AfCFTA) and its potential to transform the continent’s economy.

Dangote says that the AfCFTA could be extremely beneficial for companies like his, which are well-positioned to take advantage of the free trade agreement. His conglomerate, Dangote Industries Ltd., has 3 million tons of urea ready for export, far exceeding Nigeria’s consumption needs. 

Additionally, his company has petroleum projects and cement to export, which makes the implementation of the AfCFTA crucial for business expansion and economic growth.

However, Dangote pointed out that despite the agreement’s potential, there has been little tangible improvement. The trade between African countries remains low, around 16%, which is insufficient for the agreement to have a meaningful impact. 

Dangote stressed the need for removing visa requirements and allowing the free movement of people, goods, and services across the continent. He shared a personal experience to highlight this issue, mentioning that while traveling to Egypt, he needed a visa despite holding an African passport. This kind of bureaucratic hurdle undermines the spirit of the AfCFTA and hampers trade.

“The AfCFTA will be very, very beneficial and if you’re thinking about benefit, our company will almost be one of the top five in terms of benefiting from the free trade agreement. But I have not seen any improvement [yet],” he remarked.

The impact of imports on industrialization

Addressing the impact of imports on Africa’s industrialization, Dangote warned, “It will actually destroy the industrialization of Africa, if we continue to import. 

The more you import, you are importing poverty into your continent and exporting jobs.” He stressed the importance of industrialization driven by Africans themselves, advocating for good, consistent policies and a favorable investment climate.