Billions wasted on broken refineries - Africa's richest man tells his side of the story
Aliko Dangote expressed skepticism about the Nigerian government's capability to restore state-owned oil refineries.
His personally constructed Dangote Refinery has a processing capacity of 650,000 barrels per day.
He detailed the inefficiencies in managing refineries, referencing extensive financial mismanagement.
Dangote, CEO of the Dangote group recently called into question the likelihood of the state-owned Port Harcourt, Warri, and Kaduna refineries being operational again.
He did this at his own oil refinery, where he gave members of the Global CEO Africa from the Lagos Business School a tour of the facility while highlighting the ludicrous amount already spent on reviving the state-owned refineries.
Dangote specified that his refinery, which he initiated after the country's 16th head of state, the late President Umar Yar'adua's cancelled his plans to acquire government refineries, now produces more than 50% of its output in the form of Premium Motor Spirit (petrol), while even government refineries only devote 22% of their output to this product.
'The refineries that we bought before, which were owned by Nigeria, were doing about 22 per cent of PMS. We bought the refineries in January 2007. Then we had to return them to the government because there was a change of government,' he stated.
'And the managing director at that time convinced Yar'adua that the refineries would work. They said they just gave them to us as a parting gift or so.
And as of today, they have spent about $18bn on those refineries, and they are still not working. And I don't think, and I doubt very much if they will work,' he added.
The Nigerian billionaire emphasized that the refineries' turnaround maintenance was similar to attempting to update a car that was manufactured forty years ago, even though technology had since evolved, as reported by the Punch.
'(The turnaround maintenance) is like you trying to modernize a car that was built 40 years ago, when technology and everything have changed.
Even if you change the engine, the body will not be able to take the shock of that new technology engine,' he elaborated.
Dangote's statement corroborated the claims of Yar'adua predecessor, former president Olusegun Obasanjo last year on the refineries, two of which were closed when Mele Kyari, the former NNPC Group Managing Director, declared them open.
The NNPC understood it was unable to handle the refineries, according to Obasanjo, who further stated that when he asked foreign oil corporations like Shell to run the facilities, they refused.
Aliko Dangote and other Nigerians had invested $750 million to gain control of the refineries, but his successor Yar'adua annulled the agreement, according to Obasanjo.
What Obasanjo had said
'So, why do we do this kind of thing to ourselves? NNPC knew that they could not do it, but they knew they could eat and carry on with the corruption that was going on in NNPC. When people were there to do it, they put pressure. In a civilized society, those people should be in jail,'
Obasanjo had stated. Again, in January, Obasanjo said, 'I was told not too long ago that since that time, more than $2bn have been squandered on the refineries and they still will not work.
'If a company like Shell tells me what they told me, I will believe them. If anybody tells you now that it (the refinery) is working, why are they now with Aliko (Dangote)? And Aliko will make his refinery work; not only make it work, he will make it deliver.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
2 hours ago
- Business Insider
African students studying in U.S. advised against traveling amid Trump's new immigration policy
The Trump administration's revised immigration policy is raising alarm among African students in the United States, following the introduction of stricter visa conditions that could prevent them from leaving the country until after graduation. The Trump administration's revised immigration policy imposes stricter visa conditions on African students in the U.S. Many students and families express concerns about re-entry difficulties during emergencies or holidays. Students are advised to remain in the U.S. until completing their studies to avoid visa complications. Under the new rules, international students on F-1 visas, particularly those from Nigeria, Ghana, Ethiopia, and Cameroon, will now receive single-entry visas valid for only three months. African students who make up a growing share of international enrolments are among the hardest hit. In 2023, over 50,000 students from sub-Saharan Africa studied in the U.S., an 18% jump from the previous year This development has triggered concern among students and families about the implications for travel flexibility during emergencies, holidays, or internships abroad. This means students must enter the U.S. within that period, but once inside, they are permitted to remain for the full duration of their academic program. However, if they leave the U.S. before graduation, they risk being unable to return without undergoing a fresh and potentially delayed visa application process. The new visa framework, introduced by the U.S. State Department and effective from July 8, 2025, significantly tightens restrictions for most nonimmigrant and non-official visa categories. For Nigerian applicants, the policy shift is a sharp break from previous norms that allowed multiple-entry visas valid for up to five years. . With the fall semester approaching, many international students now face added pressure to navigate the evolving U.S. immigration landscape, one that may increasingly require them to choose between staying the course or risking denial of re-entry. Experts clarify new U.S. visa rules, dispel misinformation Business Insider Africa reached out to Sasha Ramani, Head of Corporate Strategy at MPOWER Financing, a U.S.-based lender that supports international students, for clarification following rising concern over the new U.S. visa policy, which has caused anxiety among prospective African students and their families. While the policy change has sparked widespread worry on social media and in the press, Ramani says the practical impact on students' academic plans is minimal. ' Nothing significant should change with regard to their educational plans, ' Ramani said. ' The process of obtaining a student visa remains the same. Once students enter the U.S., they are allowed to stay for the full duration of their studies.' Ramani explained that the new visa regulation mirrors rules long applied to countries like Vietnam and stems from the principle of reciprocity —where the U.S. adjusts visa conditions to reflect how its own citizens are treated abroad. Still, he acknowledged the emotional toll of restricted mobility. ' We recommend that students affected by this policy not leave the U.S. until after graduation, ' he added. ' Admittedly, we understand this may limit their ability to see family or attend to other personal priorities during their studies.' In response, MPOWER is expanding its student support efforts, offering free visa preparation courses, mock interviews with former U.S. visa officers, and tailored webinars to help international students navigate the complexities of the U.S. immigration system. ' Many students rely on agents or online forums that may not always provide accurate guidance,' Ramani noted. ' Our goal is to equip students with clear, expert-backed information so they can make informed decisions and stay focused on their academic goals.' He also stressed that fears of travel bans or blanket disqualifications are misplaced. ' We've spoken with students who incorrectly believe their country is now subject to a travel ban. That's simply not true,' he said. 'What's needed now is clarity—not panic.' Ultimately, affected students are advised to enter the U.S. within the three-month visa validity window and remain there until their studies are completed. While this may limit holiday travel, Ramani notes it could also reduce travel costs and help with long-term budgeting. 'The United States continues to welcome talented international students,' he emphasized. ' And with the right preparation, these recent policy adjustments shouldn't stand in the way of anyone's educational dreams. ' While the new visa policy introduces tighter travel restrictions, it should not discourage African students or aspiring travelers from pursuing their educational goals in the United States.
Business Insider
2 hours ago
- Business Insider
Africa's richest man picks foreign deals as Nigeria losses money to Angola via the Dangote Refinery
Hailed as a game-changer for Nigeria's energy sector, the $20 billion Dangote Refinery is currently at the center of a maritime dispute. African shipowners have expressed concern that the refinery is using ships from Angola to transport its crude and finished products, rather than Nigerian-owned vessels. The Dangote Petroleum Refinery, worth $20 billion, is a major project in Nigeria's energy sector. A maritime dispute has arisen due to the use of Angolan ships for transporting crude and finished products. Nigerian shipowners cite a lack of local vessel capacity as a hurdle in participating in refinery transportation operations. Ladi Olubowale, President of the African Shipowners Association in Nigeria, told the Punch that the Dangote Group's decision was driven by a scarcity of Nigerian vessels capable of managing such massive cargo operations. 'So I think the narrative about it is that the Dangote chartered most of the Angolan Fleet because they have vessels to be chartered, and we don't have. We don't have a vessel of that size, such as Supermax, Suezmax, or Aframax vessels, among others, that could be used,' he stated. 'Like the Angolan people, they have vessels to be chartered. If we had it, it would have been an opportunity that Dangote would have used as well. We are losing a lot of money. The benefits those guys are making, we are losing them. We are not even developing our capacity. For every trade, there are three elements: the trade, the capacity, the currency, and also the cargo,' Olubowale further explained. This development comes on the heels of rising dissatisfaction in Nigeria's local maritime industry. According to Edward Sowho, a member of the Nigerian Indigenous Shipowners Association, while Nigerian vessels are not currently involved, arrangements can be made if Dangote demonstrates a commitment to local businesses. 'The vessels he is using in Angola may not belong essentially to Angolans; there is always an arrangement for you to get vessels from somewhere else to give to a third party. For me, it is not enough of an excuse that there could be partnerships,' Sowho stated. 'If Dangote wants to use Nigerian-owned vessels, it is a matter of indicating interest. If he says I want to now confine myself to using Nigerian-flagged vessels in partnership with foreign owners, those things can be arranged. If I were to own a refinery like that and I want to move crude oil, I would approach a group like NISA and say, I need this size of vessel to move cargo, and I am sure they can arrange it. It's a question of I want to be indigenous and work with my people,' he elaborated. In light of this conversation, the Dangote Group has upheld its position, noting that demonstrated capacity would be a key determinant when selecting business partners. When contacted, spokesman Anthony Chiejine stated that the business will always work with shipowners who have the requisite capacity. 'He (Olubowale) is somebody in that business, and he has told you the challenges that they are facing. Ask the man in that sector why they are not attracting funding so that they can compete; that should be the question,' he said. Similar accusations against Dangote last week Last week, following a revelation by Aliko Dangote concerning local logistics problems, Olufemi Adewole, Executive Secretary of DAPPMAN, pointed out that most local merchants, especially small firms that depend on adaptable coastal supply networks, do not profit from Dangote's business practices. 'Since the advent of Dangote refinery, it has not been smooth sailing at all. We had preliminary meetings with their management. We received promises and assurances that we would be accommodated. We are ready and still willing to patronise Dangote. But the issue is, is Dangote ready to give us the product we want?' he stated. 'You don't get the price upfront,' Adewole explained. 'It is only after you've been cleared that a proforma invoice is issued. Meanwhile, there appears to be a select group Dangote prefers to trade with,' he added. Aliko Dangote himself voiced frustration over the numerous challenges surrounding the refinery's operations. According to the Nigerian billionaire, moving refined petroleum products from the Lekki plant costs Nigerian oil marketers more than procuring from offshore depots in adjacent countries like Togo. Dangote ascribed the pricing gap to high port taxes, bureaucratic hurdles, and inefficiencies in Nigeria's regulatory structure.
Business Insider
3 hours ago
- Business Insider
Africa's richest man picks foreign deals as Nigeria money to Angola via the Dangote Refinery
Hailed as a game-changer for Nigeria's energy sector, the $20 billion Dangote Refinery is currently at the center of a maritime dispute. African shipowners have expressed concern that the refinery is using ships from Angola to transport its crude and finished products, rather than Nigerian-owned vessels. The Dangote Petroleum Refinery, worth $20 billion, is a major project in Nigeria's energy sector. A maritime dispute has arisen due to the use of Angolan ships for transporting crude and finished products. Nigerian shipowners cite a lack of local vessel capacity as a hurdle in participating in refinery transportation operations. Ladi Olubowale, President of the African Shipowners Association in Nigeria, told the Punch that the Dangote Group's decision was driven by a scarcity of Nigerian vessels capable of managing such massive cargo operations. 'So I think the narrative about it is that the Dangote chartered most of the Angolan Fleet because they have vessels to be chartered, and we don't have. We don't have a vessel of that size, such as Supermax, Suezmax, or Aframax vessels, among others, that could be used,' he stated. 'Like the Angolan people, they have vessels to be chartered. If we had it, it would have been an opportunity that Dangote would have used as well. We are losing a lot of money. The benefits those guys are making, we are losing them. We are not even developing our capacity. For every trade, there are three elements: the trade, the capacity, the currency, and also the cargo,' Olubowale further explained. This development comes on the heels of rising dissatisfaction in Nigeria's indigenous maritime industry. According to Edward Sowho, a member of the Nigerian Indigenous Shipowners Association, while Nigerian boats are not currently involved, arrangements can be made if Dangote demonstrates a commitment to local businesses. 'The vessels he is using in Angola may not belong essentially to Angolans; there is always an arrangement for you to get vessels from somewhere else to give to a third party. For me, it is not enough of an excuse that there could be partnerships,' Sowho stated. 'If Dangote wants to use Nigerian-owned vessels, it is a matter of indicating interest. If he says I want to now confine myself to using Nigerian-flagged vessels in partnership with foreign owners, those things can be arranged. If I were to own a refinery like that and I want to move crude oil, I would approach a group like NISA and say, I need this size of vessel to move cargo, and I am sure they can arrange it. It's a question of I want to be indigenous and work with my people,' he elaborated. In light of this conversation, the Dangote Group has upheld its position, noting that demonstrated capacity would be a key determinant when selecting business partners. When contacted, spokesman Anthony Chiejine stated that the business will always work with shipowners who have the requisite capacity. 'He (Olubowale) is somebody in that business, and he has told you the challenges that they are facing. Ask the man in that sector why they are not attracting funding so that they can compete; that should be the question,' he said. Similar accusations against Dangote last week Last week, following a revelation by Aliko Dangote concerning local logistics problems, Olufemi Adewole, Executive Secretary of DAPPMAN, pointed out that most local merchants, especially small firms that depend on adaptable coastal supply networks, do not profit from Dangote's business practices. 'Since the advent of Dangote refinery, it has not been smooth sailing at all. We had preliminary meetings with their management. We received promises and assurances that we would be accommodated. We are ready and still willing to patronise Dangote. But the issue is, is Dangote ready to give us the product we want?' he stated. 'You don't get the price upfront,' Adewole explained. 'It is only after you've been cleared that a proforma invoice is issued. Meanwhile, there appears to be a select group Dangote prefers to trade with,' he added. Aliko Dangote himself voiced frustration over the numerous challenges surrounding the refinery's operations. According to the Nigerian billionaire, moving refined petroleum products from the Lekki plant costs Nigerian oil marketers more than procuring from offshore depots in adjacent countries like Togo. Dangote ascribed the pricing gap to high port taxes, bureaucratic hurdles, and inefficiencies in Nigeria's regulatory structure.
