Onwards and upwards for Africa's wealthiest businessman

African billionaire Aliko Dangote is wealthier than ever now that his long-awaited Nigerian oil refinery is up and running. Moneyweb reports that the Dangote Refinery outside 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. And it has more than doubled Dangote’s net worth to $27.8bn, according to the Bloomberg Billionaires Index. He said he wouldn’t wish the experience on his worst enemy. ‘I didn’t know what we were building was a monster,’ Dangote said during a recent visit to New York. Since the refinery started running in January, there have been disagreements with the government and state oil company, as well as concerns over its impact on locals and the environment. A Fin24 analysis notes that Dangote is an industrialist on an unparalleled scale. The bedrock of his empire is commodities: mainly cement but also sugar, salt and flour. His fortune is an anomaly in a country where 40% of the population lives below the national poverty line and sizable wealth is often tied to oil holdings. Dangote's critics call him a politically connected monopolist, but he's proud of his role in building Nigeria's manufacturing sector. Before he went into business, Nigeria imported most of its cement – a literal building block of developing markets. Now it's a net exporter of the substance. With the refinery, he saw an opportunity to do the same for the country's oil industry. He quickly ran into problems. The original site for the refinery was scrapped after four years of wrangling with local officials over land issues, he said. Dangote moved the site south to Lagos state where he met more resistance, this time from residents facing relocation (some of whom are reportedly still awaiting full compensation). The new plot turned out to be mostly swamp which had to be dredged, reclaimed and lifted nearly 1.5m to avoid flooding from rising sea levels. Dangote's holding company built a dam, its own port, a massive granite quarry and bought 332 cranes.

When Dangote's refinery opened earlier this year it had to source crude from abroad, adding to its costs, because most of the country's output was tied up in long-term contracts. Fin24 notes that it points to the difficulty of turning a profit in a country with a spiralling currency, a history of popular fuel subsidies and steep refining costs. Negotiations with the government and the state-owned Nigerian National Petroleum Corporation over foreign-exchange rates, crude supply and gas prices  – all critical to Dangote's bottom line – have sometimes been heated. The strain of building the refinery has piqued his interest in diversifying, though he's proud that the industrial sector will define him. ‘I'm passionate about it because you're going to leave a real legacy, especially in Africa,’ he said. ‘I'm making my country and continent self-sufficient in things that they never ever dreamed of.’ He can't resist drawing a comparison with Johann Rupert, the South African chairman of Cartier-owner Richemont, who until recently was closing in on Dangote's title of Africa's richest person. ‘Sorry, it's better than selling bags,’ he chuckled. ‘Some people have done really well by that too but it's not the same.’ 

Full Moneyweb report

Full Fin24 analysis