Aliko Dangote, Africa’s richest man, sets out $50bn multi-sector, continent-wide expansion plan
Nigerian industrialist Aliko Dangote plans to invest about $50bn across Africa by 2030, expanding a vertically integrated industrial model built around refining, fertiliser, cement, energy and logistics.
“Our group has actually earmarked $50bn to roll out projects under our current plan, which ends in 2030,” the billionaire entrepreneur said on September 30, noting the group had the capacity to invest across infrastructure, minerals, ports, power and chemicals.
Dangote Industries chief strategy officer Aliyu Suleiman first outlined the $50bn programme on September 25 during Kenyan President William Ruto’s visit to the Lagos refinery.
Dangote himself repeated the figure in Nairobi on September 29 and at the groundbreaking of on a planned $16bn refinery and petrochemical complex in Lamu, Kenya, one of the largest projects in the programme. The proposed 700,000 barrels per day (bpd) plant extends into East Africa a strategy already centred on large-scale refining, fertiliser and cement investments in Nigeria and elsewhere on the continent.
Dangote said the group had already invested more than $25bn in the previous five years and planned a further $50bn investment programme through 2030. Unlike the previous five-year programme, the next phase is spread across more markets and businesses. Dangote executives say internal cash flow and committed debt can support the spending, although public equity, development-finance institutions and project partners are already becoming part of the funding mix.
Dangote has presented the strategy as an effort to process more African raw materials on the continent and increase African ownership of the businesses involved. The strategy reflects a broader push by African industrial groups to move beyond commodity exports by building domestic processing capacity and regional supply chains. Commercially, the group is coupling large industrial plants with investment in ports, pipelines, energy and logistics, while opening some of its largest businesses to outside equity.
Refining absorbs the largest commitments
Refining accounts for some of the biggest projects in the programme.
In Nigeria, Dangote is pursuing a $14.3bn expansion of the Lagos refinery intended to lift processing capacity to about 1.4mn bpd by 2029.
The existing plant has reduced Nigeria’s dependence on imported petrol while supplying an expanding export business. Its expansion would give Dangote considerably more capacity for both domestic and overseas markets, although returns will remain sensitive to utilisation, crude costs and refining margins.
The financing model is already changing. The refinery opened a NGN2.15 trillion ($1.6bn) initial public offering on September 14, offering 4.1bn new shares at NGN525 each. The refinery IPO offer closes on October 13, with proceeds intended to support the expansion programme.
Source: Intellinews