Aliko Dangote, Africa’s richest man, has seen his wealth more than double to $27.8 billion following the long-awaited opening of his Nigerian oil refinery, according to the Bloomberg Billionaires Index.
The Dangote Refinery in Lagos is the biggest single-train oil refinery in the world and one of the most complex, capable of processing most global crude types. It has the potential to transform Nigeria’s economy by making the country self-reliant for fuel.
The 67-year-old Nigerian industrialist now leads one of Africa’s most ambitious private enterprises: a refinery poised to transform Nigeria’s energy sector. By producing refined petroleum products domestically, the facility aims to reduce the nation’s reliance on fuel imports, a burden that has hindered its economy despite Nigeria being the continent’s largest crude oil producer.
However, Dangote, who primarily built his fortune in cement, is aware of the challenges ahead. “I didn’t realize we were building something so complex,” he remarked in a recent interview, acknowledging the hurdles the project has encountered, including local opposition and environmental issues.
The refinery’s development took over 11 years—significantly longer than anticipated—and exceeded its original budget by more than three times. Factors such as delays, regulatory obstacles, and the unexpected repercussions of the Covid-19 pandemic contributed to the extended timeline. Additionally, Dangote’s group had to secure a $5.5 billion loan from local banks, further intensifying financial pressures during construction.
Despite its ambitious scale, the refinery’s launch has faced hurdles. While it was expected to process Nigerian crude, much of the country’s oil is tied up in long-term export agreements, necessitating the importation of crude to start operations. Negotiating favorable terms with the Nigerian National Petroleum Corporation (NNPC) regarding crude supply, pricing, and foreign exchange rates has also proven challenging, impacting the refinery’s profitability.
Relations between Dangote and the Nigerian government, historically strong, have become more strained under President Bola Tinubu’s administration.
For Nigeria, the economic potential is significant. Reducing fuel imports could save billions in foreign exchange, while the refinery is projected to generate substantial export revenues and create thousands of jobs, boosting industrial growth in Lagos.
Nonetheless, challenges persist. Nigeria’s volatile currency, high operating costs, and ongoing fuel subsidy programs pose risks to profitability. The Dangote Group has faced opposition from local communities affected by the refinery’s construction, with many still awaiting full compensation for relocations. Environmental concerns have also been raised about the refinery’s potential impact on the local ecosystem.
Despite these obstacles, Dangote remains committed, emphasizing that his investment was never solely about profits. “It’s an industry full of challenges, but I aimed to build something that would truly transform Nigeria,” he stated.
Africa’s richest man has also established a family office in Dubai, joining a wave of affluent individuals drawn to the Middle East’s financial hub. Currently ranked 65th on the global wealth list, he is recognized as the wealthiest person in Africa.
Maintaining wealth in Nigeria has become increasingly difficult, especially as Tinubu’s easing of foreign exchange regulations has led to the naira losing over two-thirds of its value against the dollar. With 80% of his business dollarized, Dangote anticipates that his group will be the largest provider of dollars in Nigeria next year.
Dangote maintains strong ties to his homeland, having lived in the same Lagos residence for 34 years. To diversify his investments, he is setting up a family office in Dubai, managed by his daughter Halima, who relocated there this summer.
Like a fund he established with David Rubenstein, co-founder of Carlyle Group Inc., he plans to co-invest in ventures and collaborate with other billionaires.
Through his foundation, Dangote donates millions annually and aims to contribute $10 billion in the future. He has also begun to contemplate a transition, considering handing over the company to his children and family members, including his grandson, who will graduate from college next year.
Dangote mentioned that he has two homes—in Kano and Lagos—and often stays in a rented apartment during visits to Abuja.
