Africa’s richest man, Aliko Dangote, is not looking back. The man touted by Forbes as the richest balck man in the world is adding more nuts in the fire in the hope of reaping more and dwarfing his current financial status. Recently, he signed a $3.3 billion deal with 12 Nigerian banks to finance the building of an oil refinery in Nigeria. The oil refinery would be the largest in Africa and when operational, it will make Nigeria a petroleum products exporter. The African billionaire recently told the BBC that the venture would also be a significant source of jobs for Nigerians.
“At the completion of these projects we expect Nigeria to become not only self-sufficient in fertilizer and refined petroleum products but indeed to become recognized as a leading exporter of these products,” Dangote said at the deal signing.
At present, despite being one of the world’s leading exporters of oil, Nigeria has to import most of its fuel due to decrepit refineries that are on a whole unable to meet the nation’s needs.
Dangote through the refinery will produce 400,000 barrels of oil per day and 2.8 million tons of urea for fertilizing crops. The venture will also produce polypropylene, used to make plastics. The refinery is due to be operational by 2016.
The $3.3 billion syndicated loan deal was led by Standard Chartered Bank and Guaranty Trust Bank.
Dangote has ventured into a number of new business lines this year including a recent foray into the tomato paste business earlier this year.
In June, it was reported that Africa’s richest man, Aliko Dangote, was now the world’s 25th richest man worth an estimated $20 billion thanks to a leap in the stock value of his largest holding, Dangote Cement in which he owns a 93 per cent stake. Dangote is a man not noted for half-measures. In whatever sector he plays, he aims for the top, for dominance. Sometime this year, he officially ventured into Nigeria’s lucrative tomato paste business by teaming up with the Central Bank of Nigeria to establish a $25 million tomato-paste factory that could boost the income of tomato farmers around the country.
The Central Bank of Nigeria reportedly teamed up with Dangote after an internal study showed that processing local tomatoes is cheaper than importing paste from China. The partnership is part of the country’s drive to cut down annual food imports in the country.
“We want to prove that with the right application of government policy we could get finance to the sector, improve productivity, create jobs and raise income,” said Central Bank of Nigeria Governor, Sanusi Lamido Sanusi.
Global business website, Bloomberg Businessweek interviewed a Nigerian tomato farmer, Shittu Ibrahim recently who ekes out a living for his two wives and 11 children by selling tomatoes he grows to passersby along a highway that runs through the Kadawa Valley near Kano. Ibrahim is hopeful about the news of Dangote’s foray into the tomato paste business saying: “We are doing this only to feed, as you can see, I can’t afford the luxuries of life,” the stocky 56-year-old said. “There are better prospects in supplying Dangote because people will buy from them from all over the country. We hope that things will improve. Before, the price of tomatoes would keep going down because all the farmers sell at the same time,” he said. With the coming of the Dangote factory, prices won’t go down that way any more. We can be sure of a stable income,” he continued
Nigeria currently pays more than $360 million annually to import more than 300,000 metric tons annually of tomato paste from companies such as China’s Baoding Sanyuan Food Packing Co.
Dangote’s tomato paste business would be run by Dangote owned Dansa Holdings and reportedly took up the mandate after the government failed to get importers including Olam, Conserveria Africana Ltd. and Chi Group Ltd to form a venture. According to the CBN, farmers will receive a guaranteed price of about $700 per ton compared to an average of about $350 that they currently receive.
“It’s a win-win situation. We have a price we can compete with and the farmer has a price that makes the tomato a good value,” said Sani Dangote, Aliko Dangote’s brother who serves as Vice President of Dangote Group. “It’s only agriculture that can take poverty away overnight because it doesn’t take long for the farmer to see the results and reap the rewards.”
The plant will commence operations in November 2013 and will produce more than 400,000 tons of tomato paste annually.
