Dangote Gives Reasons For Rejecting NNPCL’s Bid To Increase Equity In His Refinery

According to Ireporter Online, the President of the Dangote Group, Aliko Dangote, has disclosed that the conglomerate declined attempts by the Nigerian National Petroleum Company Limited (NNPCL) to increase its 7.25 per cent equity stake in the Dangote Petroleum Refinery.

Recall that in 2021, the NNPCL acquired a 7.25 per cent stake in the multibillion-dollar refinery for $1bn, with an option to expand its holding by an additional 12.75 per cent by June 2024. However, the national oil company reportedly did not proceed with the planned additional investment.

Speaking during an interview with the Chief Executive Officer of the Norwegian Sovereign Wealth Fund, Nicolai Tangen, Dangote confirmed that NNPCL had made moves to acquire more shares in the refinery, but the offer was turned down.

He explained that the decision was driven by plans to eventually list the refinery publicly, allowing broader participation and enabling more Nigerians to own shares in the facility.

Addressing risks to his business empire, Dangote pointed to civil unrest and policy inconsistency as major concerns, noting that government policy instability remains a key challenge for large-scale investments.

He further revealed that shareholders across Dangote Group businesses, including cement, petrochemicals, fertiliser, and the refinery, would receive dividends in dollars, citing the company’s strong export-driven revenue base, with about 80 per cent of earnings expected in foreign currency.

Dangote also highlighted the extensive financial backing that supported the refinery project, including funding from Nigerian banks and international institutions such as Afreximbank, Africa Finance Corporation, Zenith Bank, Access Bank, UBA, Standard Bank of South Africa, and Standard Chartered Bank.

He added that while the initial plan was to rely largely on internally generated funds, currency depreciation necessitated broader financial support, which ultimately strengthened the project’s execution.

Reflecting on his personal commitment to the refinery project, Dangote said he divested from overseas property to focus fully on building industrial capacity in Nigeria, describing his approach as disciplined and vision-driven, with clear long-term targets for his businesses, including a 2030 outlook.

He also reiterated that his investment philosophy is guided by identifying essential goods needed by the population and prioritising local production through backward integration, aimed at reducing import dependence and strengthening domestic industrial capacity.