At its recent meeting, the committee increased the Monetary Policy Rate (MPR) by 50 basis points from 26.75% to 27.25%, while also raising the Cash Reserve Ratio (CRR) for Deposit Money Banks from 45% to 50%, and for Merchant Banks from 14% to 16%. The Liquidity Ratio (LR) remains unchanged at 30%, and the Asymmetric Corridor at +500/-100 basis points around the MPR.



The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has voted to raise key interest rates in a bid to tackle inflationary pressures and boost investor confidence.



Olayemi Cardoso, Governor of the CBN and chair of the MPC, explained the rationale behind the adjustments during a press briefing. &#8220;To attract investments into the economy, efforts must be sustained to achieve a positive real interest rate,&#8221; Cardoso stated. &#8220;This would enhance the economy&#8217;s competitiveness for international capital, thereby improving the exchange rate.&#8221;



Cardoso noted that while inflation showed signs of moderation in recent months, with Nigeria’s annual inflation rate falling to a six-month low of 32.15% in August, down from 33.40% in July, core inflation remains elevated due to rising energy prices.



He also pointed to the anticipated benefits of the Dangote Refinery, which recently began shipping gasoline.



Nigeria’s state-owned energy company, Nigerian National Petroleum Corporation (NNPC), commenced gasoline shipments from the Dangote Refinery in mid-September under a crude-for-gasoline swap agreement. The refinery, located on the outskirts of Lagos, is set to receive 385,000 barrels of crude per day from the NNPC beginning in October. The swap, conducted in local currency, is expected to stabilize transportation costs and ease foreign exchange pressures, according to officials.



The 650,000-barrels-per-day Dangote Refinery is expected to produce enough gasoline to meet Nigeria’s domestic demand, reducing the need for costly fuel imports.



&#8220;The committee expressed optimism that the lifting of refined petroleum products from Dangote refinery will moderate transportation costs and significantly support the easing of food price pressures in the short to medium term. This is also expected to moderate foreign exchange demand for importation of refined petroleum products, with a positive spillover on external reserve and improvement in the overall balance of payment position.,&#8221; Cardoso said.

General Economy As Nigeria Faces Rising Debt In 2020

CBN Increases Rates To Combat Inflation, Eyes Boost From Dangote Refinery

Alterra Capital Partners, founded in 2020, raised $140 million in an initial phase towards a $500 million fund for Africa&#8217;s growth. Influential investors support diverse sectors, including technology and telecommunications. Analysts emphasize its impact on economic development and infrastructure challenges in nations like Nigeria, proposing solutions for increased internet penetration. 



Alterra Capital Partners, a private equity firm founded in 2020 by former Carlyle Group executives, Genevieve Sangudi, Eric Kump, Idris Mohammed and Bruce Steen, has raised $140 million in the initial phase of a $500 million fund.



This fund is poised to fuel growth in various sectors across Africa, including telecommunications, technology, logistics, healthcare, consumer, and retail. Influential investors such as Nigerian billionaire Aliko Dangote, along with Carlyle founders David Rubenstein and Bill Conway are reportedly backing this initiative.



Joining the league of investors are prominent entities like Norfund AS, Standard Bank Group Ltd., International Finance Corp., Deutsche Investitions- und Entwicklungsgesellschaft GmbH from Germany, and Allianz SE’s AfricaGrow fund.



According to information available on its website, the Africa-focused private equity firm based in Johannesburg, South Africa, leverages over 100 years of combined private equity experience, originating from the blending of Carlyle Africa and Emerging Capital Partners, which has already invested more than $2 billion in 23 companies across the continent.


<div class="wp-block-image">
<figure class="alignleft size-large is-resized"><img loading="lazy" decoding="async" width="683" height="1024" src="https://cms.forbesafrica.com/wp-content/uploads/2023/10/Genevieve-Sangudi-image-supplied-683x1024.jpg" alt="" class="wp-image-59808" style="aspect-ratio:0.6669921875;width:347px;height:auto" srcset="https://cms.forbesafrica.com/wp-content/uploads/2023/10/Genevieve-Sangudi-image-supplied-683x1024.jpg 683w, https://cms.forbesafrica.com/wp-content/uploads/2023/10/Genevieve-Sangudi-image-supplied-200x300.jpg 200w, https://cms.forbesafrica.com/wp-content/uploads/2023/10/Genevieve-Sangudi-image-supplied.jpg 750w" sizes="auto, (max-width: 683px) 100vw, 683px" /><figcaption class="wp-element-caption">Genevieve Sangudi; image supplied</figcaption></figure></div>


Kolawole Oyebola, an analyst, highlights the significance of the fund&#8217;s strategy, emphasizing the diverse sectors it targets as pivotal for the continent&#8217;s economic growth.



&#8220;This successful initial fundraising is a testament to the confidence investors place in the potential of Africa&#8217;s dynamic and rapidly evolving landscape,&#8221; states Oyebola to FORBES AFRICA. &#8220;The fund&#8217;s comprehensive approach, encompassing telecommunications, technology, logistics, healthcare, consumer, and retail sectors, reflects a keen understanding of the multifaceted opportunities present in the African markets.&#8221;



Africa has increasingly become a focal point for global investors seeking high-growth opportunities. The fund&#8217;s primary goal is to support and catalyze innovation in key sectors, contributing to job creation, economic development, and the enhancement of essential services across the continent.



Oyebola further emphasizes the potential impact of the fund on Africa&#8217;s technology ecosystem, stating,



&#8220;Investments in technology and telecommunications are especially crucial, given their potential to leapfrog traditional development stages, bringing about rapid advancements in connectivity and digital infrastructure.&#8221;



The fund&#8217;s $500 million target signifies a substantial commitment to fueling transformative projects in Africa. Oyebola urges continued attention to the evolving investment landscape on the continent, stating, &#8220;As Africa continues to assert itself as a hub for innovation and economic opportunity, strategic investments like these will play a pivotal role in shaping its future trajectory.&#8221;



Technology enthusiast Destiny Young sharing his insights with FORBES AFRICA questions the potential benefits for his home country, Nigeria, emphasizing the critical role of infrastructure in enabling internet penetration.



&#8220;In investing in telecommunications and technology, it&#8217;s crucial to understand that it encompasses the entire infrastructure supporting internet access,&#8221; remarks Young.



Citing Surfshark data, he highlights Nigeria&#8217;s 109th global ranking with an index 44 times lower than the global average, underscoring challenges in internet access and quality.



Young emphasizes the impact of underfunding on Africa&#8217;s telecommunications sector, referencing a report by the South African Institute of International Affairs (SAIIA), which identified the continent&#8217;s Information and Communication Technology (ICT) deficit as a hindrance to development.



Noting Nigeria&#8217;s struggle to increase internet penetration amid funding deficits, he states, &#8220;Increasing internet penetration in developing economies requires a multi-faceted approach.&#8221;



Providing solutions, Young suggests measures for Nigeria, including promoting public-private partnerships, reducing mobile device and internet costs, enhancing digital literacy, encouraging local content creation, improving regulatory frameworks, attracting foreign investment, promoting innovation, and fostering collaboration among stakeholders.



He stresses the importance of ensuring private equity investments align with the long-term interests of the country and its citizens.



In the midst of global economic challenges, multinational tech consultant Napa Onwusah underscores the timeliness of Alterra&#8217;s focus on key African sectors, stating, &#8220;Considering the decline in startup funding and unique investors, targeted investments are crucial in this landscape.&#8221;



Onwusah commends Alterra&#8217;s strategic flexibility, allocating 50% of funds to dollar-generating companies, and notes the significance of the British International Investment&#8217;s $6 billion commitment to Africa.



To navigate diverse African markets, Onwusah emphasizes the importance of agility, market awareness, and tailoring strategies to local conditions, stating, &#8220;Maximizing impact requires a balanced approach to profitability and sustainability.&#8221;



Addressing challenges, Onwusah sees opportunities for impactful solutions, stating, &#8220;Infrastructure gaps and talent shortages can be addressed through strategic investments in development and education.&#8221;



She advocates for managing economic and political instability through diversified investments and proactive risk assessment.



Onwusah encourages a socially responsible investment approach, stating, &#8220;Contributing positively to Africa&#8217;s development is not just financial success but dispelling negative perceptions.&#8221;



She urges investors to view Africa as a dynamic landscape with potential for progress.



Citing McKinsey&#8217;s data, she highlights the potential of African startups to contribute $2.6 trillion to the continent&#8217;s GDP by 2030.



Onwusah emphasizes the cascading effect of increased funding in the tech ecosystem, fostering innovation, job creation, entrepreneurship, and sustainable economic development.



She says: &#8220;It&#8217;s about igniting a transformative journey, empowering local talent, and positioning Africa as a global innovation powerhouse, a journey Alterra&#8217;s fund has the power to catalyze.&#8221;

Abuja, Nigeria.

Dangote-Backed Private Equity Firm Secures $140 Million In Initial Funding For $500 Million Africa-Focused Fund

There is something at play that many company leaders just can’t get right – acquiring other companies. Many assumingly lucrative companies were acquired and then failed.
Either there was a lack of full disclosure before the transaction, or the new owners were over confident in their ability to create astronomical profits from those companies.
A mantra I fully subscribe to is, great companies are bought, not sold.
When a company approaches you to sell their business, you must ask why they are selling. Could it be that the ship is about to sink, are they relocating, retiring, bored by their industry or do they foresee calamity.
Back in 2012 Tiger Brands acquired 63% of Dangote Flour Mills, therefore controlling the company; changed the name to Tiger Branded Consumer Goods Plc. However, the company performed poorly.
Three years later, Dangote Industries had to buy it back for a nominal $1 and took over their debts. Tiger Brands had to write off R700 million ($53 million) in loans that it granted the operation.
<a href="http://www.forbesafrica.com/investment-guide/2017/07/05/timing-is-everything/" target="_blank" rel="noopener">Timing Is Everything</a>
On the same note, in January 2005, Bebo, a social networking website, was launched. It became one of the most visited sites, with millions of active users. In 2008, AOL came along, excited about the prospects of expanding it. They purchased it for $850 million – making the founders, Michael and Xochi Birch, $595 million richer as they owned 70% of the company.
In May 2013, the company voluntarily filed for Chapter 11 bankruptcy protection. On July 1, 2013, the Birches paid $1 million to get the social network back. Consider the profit they made after receiving $595 million for the company five years before.
In both stories, the former owners bought the companies back for a price drastically less than they sold them for.
<a href="http://www.forbesafrica.com/investment-guide/2017/09/13/tech-can-close-gap-africa/" target="_blank" rel="noopener">How Tech Can Close The Gap In Africa</a>
There were many examples of this type of disaster during the dot-com bubble around the turn of the new millennium. A promising company, owned by Mark Cuban and partners, was on the rise. Back then, Broadcast.com was breaking ground with online live streaming.
Yahoo! got excited about the new concept and jumped into a hole thinking it was a springboard. In 1999, they purchased Broadcast.com for $5.7 billion in Yahoo! stock. Cuban became a billionaire and quickly diversified his newly-found pot of gold into other asset classes.
Broadcast.com soon went bust, becoming one of the spectacular failures of the last two decades.
It wasn’t the most notorious failure though. The worst of all time is AOL again. They acquired Time Warner for $160 billion to create the world&#8217;s largest media company. Within 18 months, the company reported a $99 billion loss and the combined value of the company had dwindled from $226 billion to $20 billion. Unthinkable!
With most failed acquisitions, what is often evident is that the entrepreneurial drive is misplaced. The original vision is lost as the company is absorbed into a big corporation that does not share the same founding values and company culture.
To become a gigantic multinational, acquisitions are quicker than organic growth. We cannot avoid acquisitions as a growth mechanism. So, how do entrepreneurs, looking to make an acquisition, institutionalize the vision, drive and company culture that will exist beyond the founder?
Due diligence needs to be done, and the top talent at those companies need to be retained, particularly at an executive level. It is common for major companies to acquire just 80% of another company, leaving 20% for the management and founder. This keeps them motivated and encourages them to stay and help the company to continue to grow. &#8211; Written by Paul Mashegoane

Be Prudent When Purchasing

Aliko Dangote lives as you might expect, given he’s the richest person in Africa and resides in the same country being bullied by the insidious Boko Haram terrorist group, which finds something noble in kidnapping village girls. Located on Victoria Island, a wealthy Lagos enclave that has a moat in the form of a lagoon and the far eastern shores of the Atlantic Ocean, his mansion comes with all the trimmings: massive black gate, bulletproof windows, Big Brother video surveillance, guards and a secret entryway.
<img loading="lazy" decoding="async" class="alignleft size-medium wp-image-3526" src="/wp-content/uploads/2017/04/cut-218-sugar_W9V1416-290x300.jpg" alt="" width="290" height="300" />
After I enter, a butler motions to a sitting room overlooking a patio and a blue-tiled pool. The three-story fortress is shielded from the 90-degree heat by powerful air-conditioners (themselves presumably shielded from Nigeria’s notoriously unreliable electric grid by diesel generators). Dangote, round-faced with a trimmed graying moustache, appears from upstairs dressed in khakis and a casual blue button-down. The 57-year-old can seem miscast in the role of industrial titan, often speaking so softly that he mumbles.
As breakfast arrives by the platterful, including plantains, smoked chicken in red sauce, diced sweet potatoes, whitefish and sausage, he sticks to coy conversation. Whether about his country’s fraught presidential election (“It’s going to be tough for both parties”) or his cement company’s long-delayed overseas listing (“Maybe next year”), he has little to say. On one subject, though, he is always articulate. “Nigeria is one of the best kept secrets,” Dangote says. “A lot of foreigners are not investing because they’re waiting for the right time. There is no right time.”
Nigeria does provide fertile opportunity for vast wealth. As evidence, look no further than Dangote’s No. 67 rank on the World’s Billionaires List and his $14.7 billion fortune – mostly from three majority stakes in publicly traded cement, sugar and four companies. And he doesn’t arrive here alone. In another dramatic sign of his country’s emergence, Nigeria has overtaken South Africa on FORBES’ 50 Richest in Africa ranking. Thirteen Nigerians earned spots in 2014, including a trio of new billionaires.
Dangote and these other Nigerians power Africa’s largest economy. The drop in crude prices prompted the oil rich country’s stock index to plunge 40% last year, taking Dangote’s net worth down in lockstep – no surprise, since his companies account for almost a third of the nation’s benchmark index (his $10.3 billion drop in net worth was the world’s largest last year). But the underlying fundamentals are strong. From 2010 to 2013, Nigerian GDP expanded by an average of 5% a year. (It now totals some $500 billion, or a third larger than South Africa.) Even with the oil glut, forecasters believe this year’s growth will top 5%. In fact, according to a widely cited Citigroup report, economists expect Nigeria to have among the fastest average annual GDP growth in the world between 2010 and 2050.
There are other reasons for international interest as well. In the shadow of rising Islamic militancy, which has destabilized the Middle East and now threatens to do the same to parts of Africa, President Obama recently issued an executive order tasking US business executives with strengthening trade ties to sub-Saharan Africa (the council includes heavy hitters from Wal-Mart, G.E. and McKinsey).
Prior to that, in May 2014, he dispatched Penny Pritzker to Nigeria, the first visit by a Commerce Secretary in two decades. America’s foreign direct investment in Nigeria reached a continent-leading $8.2 billion in 2012, the last year for which statistics are available. Overall US-Nigerian trade was $9.8 billion last year. Nigeria sells far less oil to America these days – it exported $2 billion of the black stuff last year as the US’ tenth-largest supplier – so most of that trade comes through other goods and services.
<img loading="lazy" decoding="async" class="alignleft size-medium wp-image-3524" src="/wp-content/uploads/2017/04/cut-214-oil_W9V1072-300x296.jpg" alt="" width="300" height="296" />
Keeping Nigeria successful is critical. The country is already Africa’s most populous, with more than 170 million people, and that figure will swell to 210 million by 2020. By 2050, Nigeria is forecast to overtake the United States (440 million to 400 million). Yet a majority of the people subsist on less than $1.25 a day. About half are illiterate; most are very young (the country’s median age is 18.3). And 50% of rural Nigeria lacks access to clean drinking water. It’s hard to imagine the government coming to grips with it all, even if oil prices recover. Nigeria consistently ranks in the bottom quarter of the most corrupt countries in the world, according to Transparency International, and is proving a feckless pursuer of the Boko Haram thugs terrorizing the northeast.
All of which makes Dangote – well connected, wildly wealthy and ready to do business – an increasingly important player on the world stage. “Anyone doing business in Africa,” says David Rubenstein, the cofounder of the Carlyle Group and a fellow billionaire, “knows Dangote.”
The roots of Dangote’s rise lie 150 miles south of the Sahara in his hometown of Kano, Nigeria’s second largest city. A dusty metropolis, Kano has been a trade center and commercial hub since its establishment in the 10th century, thanks to its strategic location on the edge of the vast desert. Egyptian perfumes, incense, inks and mirrors dominated at first, then leather goods. The camel caravans became lucrative enough to fight over; wars broke out with neighboring kingdoms. When the British arrived in the late 1800s, Kano was West Africa’s most important business center.
Under British rule, Sanusi Dantata, Dangote’s grandfather, grew rich trading commodities like grain oats and rice, and ranked as one of Kano’s wealthiest citizens. Dantata insisted on personally raising his grandson – not an unusual arrangement in northern Nigerian culture – and instilled a businessman’s mind-set in Dangote at a young age. At the age of eight, he turned allowance into startup capital. “I would use it to buy sweets, and I would give them to some people to sell, and they would bring me the profit,” Dangote says. “When you are raised by an entrepreneurial parent or grandparent you pick that aspiration. It makes you be much more aggressive – to think anything is possible.”
The country was growing up, too. Post-colonial instability, including countless coups and a civil war in the 1960s, was eclipsed by an oil boom in the 1970s. During that decade, the economy grew 18% annually, with many of the spoils going to well-connected elites. Despite the explosion of revenue, the World Bank still considered Nigeria – along with countries such as Bangladesh, Ethiopia, Chad and Mali – as “low income,” a candidate for international aid.
Dangote, a Muslim, attended Al-Azhar University in Cairo and studied business. After graduation, he asked his grandfather for permission to move to Lagos. A $500,000 loan from his uncle set up 21-year-old Dangote as a trader of rice, sugar and cement. He was well capitalized and a naturally talented trader. He imported sugar from Brazil and rice from Thailand and sold them locally at a huge mark-up. At his height, he says, he was pocketing $10,000 in profit a day. “Things were quite good,” he says. “It allowed us to create an awful lot of cash.”
He also worked the politicians. According to a State Department cable unearthed by WikiLeaks, Dangote “held exclusive import rights in sugar, cement, and rice, using such advantages to do volume business and undercut competitors.” Dangote flatly denies this.
Dangote’s success landed him firmly on America’s radar. A 1994 diplomatic cable singled him out as a businessman to know in Nigeria and drew attention to his clan’s homes in Kano, Lagos, London and Atlanta. The State Department report also highlighted the annual family vacation to the States.
A 1995 trip to Brazil convinced him to shift from trading to manufacturing. Why continue to play middleman when he could make the stuff in Nigeria instead and pocket even more profit? His resolve was strengthened in 1999, when Nigeria held its first democratic presidential election in six years, choosing a bespectacled former military ruler and chicken farmer named Olusegun Obasanjo, whom Dangote had known since 1981. As a key part of his platform, Obasanjo had pledged to protect and promote domestic industry.
That’s all Dangote needed to hear. Dangote Sugar started in 2000 and quickly expanded the annual production capacity of its refinery at Lagos’ Apapa Port to 1.44 million tons, enough to satisfy 90% of national demand. By the time Dangote Sugar debuted on the Nigerian Stock Exchange in 2007, sales had quadrupled to $450 million. The four firms, which began in 1999 and also produces pasta and noodles, followed a similar trajectory. It began with a single mill, tripled revenue to $270 million, increased capacity eightfold to 1.5 million tons – then joined Dangote Sugar on the NSE in 2008, the same year Dangote became the first Nigerian on FORBES’  World’s Billionaires list, at No. 334. In 2005, Dangote secured a $480 million loan led by the World Bank’s International Finance Corporation – Nigerian banks didn’t have the ability, or the stomach, to put up the cash alone – and agreed to plunk down $320 million of his own money to build a cement factory. Dangote Cement listed on the NSE in 2010 as a $1.3 billion-in-sales company. The three companies today do a combined $3 billion in revenue; while Dangote Flour operates at a loss and Dangote Sugar’s net margin falls in line with Brazilian peer Cosan, the cement company is wildly profitable, with a margin of 52% – about double that of close competitor LaFarge Africa.
Obasanjo, re-elected in 2003, worked overtime to ensure that any Dangote challenger who entered the market did so with a significant handicap. At the time Dangote’s sugar and four companies went public, raw sugar was taxed 12 times less than refined sugar, wheat six times less than flour. Dangote Cement prospered from restrictive licenses. The companies retain a vice-like grip on their industries today, controlling at least half of the cement and sugar markets and about 25% of four.
“When Obasanjo took over, he took guys with him,” says a Nigerian belonging to the country’s overlapping circle of business and political elites. “He gave them a leg up.”
Last August, as the Islamic State overran northern Iraq and Boko Haram was declaring its own caliphate in Nigeria, the White House held a US-Africa trade summit in Washington, DC. A highlight was the announcement of a $5 billion fund backed by Wall Street billionaire Steve Schwarzman’s Blackstone Group – and Dangote. They plan to invest in infrastructure companies throughout sub-Saharan Africa.
“We can do well as investors, and the countries will do well,” Schwarzman says. “We’re aware that operating in Africa isn’t as easy as many other places. You have to have a very strong local partner, and we were lucky enough to find Aliko. He’s done a remarkable job.”
Rubenstein, of the Carlyle Group, sought out Dangote as well when raising money for his firm’s first sub-Sahara-focused fund in 2012. Dangote ultimately invested in the $700 million fund.
“His name carries a great deal of weight,” Rubenstein says. “If you say he’s an investor with you that carries a lot of weight. He’s helped us.”
The Carlyle fund has so far invested in five companies, including a $147 million deal last November for Nigeria-based Diamond Bank, a retail lender.
It’s all part of Dangote’s fast-rising international profile. He’s a Davos regular, and appeared with Goodluck Jonathan, Nigeria’s current president, on a panel about investment potential in Africa at the 2014 World Economic Forum. Even four years ago, he was there making a familiar pitch: “Don’t give any more aid to Africa,” he said. Invest with local partners instead. “You will make money, and we’ll make money, and it’s better for everyone.”
But it is not in Dangote’s nature to rely on others to prosper. Mostly, he relies on himself.
He trusts few others with real power at his companies, often making decisions with little more than gut feeling, says a former top executive.
“Ultimately all the decisions sit with the boss, Dangote, rather than the senior management,” the executive says.
Self-reliance and a supremely healthy ego blend seamlessly into a cult of personality at Dangote’s firms. Portraits of him hang on the walls. The average Dangote employee seems to virtually worship him.
“I’m going to be a big man, I’m going to be the next Dangote,” a lab technician at the one of the cement plants says over and over again until his sentiment is recorded on paper. A lieutenant warns that Dangote will walk out of a meeting if it starts even a minute late.
But Dangote is hardly the hermetic workaholic (“I don’t think I’ll ever retire”) he puts on. “He attends more parties than anyone I know,” says Jim Ovia, a banker and close friend. One Sunday last month found Dangote on his yacht – christened Mariya after his mother – and then flying to Geneva on Monday to see his grandchildren. Later that week, he met first with the French general counsel and then with Davido, Nigeria’s biggest pop star.
Another recent social call: breakfast with former president Obasanjo, then onto Abuja to meet the current president. Dangote has good reason to keep up with Jonathan, whose government still enforces Obasanjo-era high tariffs on imports that compete with Dangote’s key products. Indeed, the State Department has come to see Dangote as completely inseparable from the Nigerian government.
“But without him a lot of people wouldn’t have jobs,” says a former US diplomat in Africa. “And Nigeria would be weaker.”
Jonathan’s reign may soon end: He faces a surprisingly strong challenger in this March’s presidential election, and Boko Haram’s unchecked bloodshed is at least partly to blame. The insurgents have killed an estimated 20,000 people, displaced more than a million and now control some 20,000 square miles within Nigeria. Jonathan’s opponent – a retired army general – is seen by his supporters as the best man to finally defeat the terrorists. For Dangote, the upheaval has meant lower demand for his cement (“There are places in the north where no one is thinking of building a home,” one Dangote executive says), and he cut cement prices twice last year, most recently by 14% in November. But whether it’s Jonathan or someone else ruling Nigeria, observers find it difficult to believe that anyone would shut him out of the presidential palace. He’s simply too important to the economy.
Oil represents another big play. He is busy building a refinery some 40 minutes by car outside central Lagos. He explains with uncharacteristic glee that the recent drop in prices will actually make construction easier. His suppliers will be desperate… and easy pickings. “We will be the only ones around,” he says. “We will carry a big knife and cut them on prices.”
The refinery, Dangote says, can be profitable even at $50 to $70 a barrel. Raw crude for the refinery will come from multiple suppliers. If all goes according to plan, it’ll produce 650,000 barrels a day – a variety of gas, diesel and jet fuel. Dangote would basically walk away with a monopoly on refined oil in the country: The four Nigerian National Petroleum refineries are viewed as corrupt to the point of non-functioning.
To make it happen, Dangote plans to invest some $10 billion to $11 billion in the project and an adjacent petrochemical plant, with at least $6.75 billion in debt financing. Dangote threw a big celebration the day he signed the loan terms at the Hilton in Abuja. Guests included state governors, bank executives and, naturally, the president.
Terraforming is almost complete on the refinery’s 10-square-mile site – a jungle swamp now turned into a sandy expanse. A drive-through reveals a few stick huts, the last remnants of native villages that were there before Dangote arrived. Dangote executives promise the government has compensated the displaced natives well. As a stream of black Dangote trucks pass – one with a full bed of armed guards – a woman scurries inside a hut and shoots back a dark look.
The convoy pulls to a halt on a palm-tree-lined beach, a tropical paradise more suited to multimillion-dollar condos than refining petrochemicals. It’s a goner, though, the future home of another Dangote empire.
“The refinery will start in 2018 if we finish on time,” Dangote says, optimistic as always. “By that time all the dead bodies will have been removed from the street. All the trouble will be gone.”

Tag: Dangote

FORBES AFRICA SOCIAL MEDIA

CBN Increases Rates To Combat Inflation, Eyes Boost From Dangote Refinery

Dangote-Backed Private Equity Firm Secures $140 Million In Initial Funding For $500 Million Africa-Focused Fund

Be Prudent When Purchasing

The Gatekeeper To Growth