The Dangote refinery was established at a total cost of $18 billion, according to Godwin Emefiele, the Governor of the Central Bank of Nigeria, CBN.
He stated this while giving a speech at the commissioning of the Dangote refinery in Lagos state earlier today, May 22.
According to Emefiele, the Dangote Group and the CBN partnered on the refinery project so that there will be a successful completion of the project with over N125 billion to cover domestic currency requirements and to ensure that there was availability of foreign exchange to pay for equipment imports needed.
He explained that in 2013 when Dangote first indicated interest in setting up a refinery, the total cost was budgeted at $9 billion.
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However, by 2017, the refinery set up costs had escalated from $9 billion to $18.5 billion with 50% equity investment by Dangote and 50% debt finance by local banks. Emefiele said:
“The commercial loan component of the project was financed by domestic banks with the balance from foreign banks. I am delighted to announce that the Dangote Group paid down some portion of commercial loans before the refinery’s commissioning. As of today, total loans outstanding have dropped from over $9 billion to $2.7 billion.”
“This reflects the astute creditworthiness and commercial capability of the Dangote Group. Please permit me to appreciate all the participating local banks, who provided immense support to the refinery project because they were aware of the importance of the project.
“Even when interests and principal payments were almost overdue, they were patient.”
Recall that in January 2019, Emefiele announced that the CBN would provide a N75 billion financial facility for the Dangote refinery project. At the time, Emefiele also said that Aliko Dangote had already invested about 50% of the $9 billion dollars needed to complete the project, while the remaining 50% will be sourced as loans from both local and foreign lenders.
Also in September 2021, Emefiele said the Dangote refinery would help achieve the import substitution objective of the apex Bank, which means that products that were imported would be produced locally. Thereby saving foreign exchange that the CBN uses to fund the import of these products.
During his speech at the commissioning of the Dangote refinery earlier today, the CBN Governor, Emefiele said the refinery operations will have surplus products available for exports which will aid domestic production needs but also help in generating export revenues for Nigeria. According to him, Nigeria can be self-sufficient in all products that the country consumes.
