American credit rating agency Fitch Ratings says Nigeria’s richest man Aliko Dangote needs about $1.1 billion (N900 billion) to complete h...
American credit rating agency Fitch Ratings says Nigeria’s
richest man Aliko Dangote needs about $1.1 billion (N900 billion) to complete
his refinery in Lagos.
The project, located in the Lekki area of Lagos, and
expected to have finished in 2019, was reportedly delayed due to a lack of
money and the adverse effects of the COVID-19 pandemic.
In May, Fitch Ratings released a company overview for the
company, revealing that Mr Dangote invested all of his money and borrowed
additional funds to finance the project.
The credit rating agency revealed that Dangote Industries
Limited was planning to establish a local bond worth $750 million to partially
fund the remaining part of the project.
“Funding for the completion of the refinery project is
expected to be partly covered by proceeds of the new bond,” stated the Fitch
report.
It further detailed that the refinery’s existing creditors
will not be able to give the organisation the amount needed for the completion
of the project “if the transaction is not successful or should completion cost
overrun or market conditions in the cement or urea deteriorate materially.”
The rating agency declared that Dangote Industries suffered
from weak corporate governance, adding that having Mr Dangote as CEO and main
shareholder will pose a lot of risk to the operations of the organisation.
President Muhammadu Buhari’s regime is relying on the
yet-to-be completed refinery to turn the country’s fortune around.
Last April, information minister Lai Mohammed described the
project as a game-changer to conserve foreign exchange by ending importation of
petroleum products, creating employment and generating foreign exchange through
export of finished products.
Mr Mohammed had also disclosed that with the total
investment above $19 billion in the refinery and $2.5 billion on the Dangote
Fertiliser Plant, the company was leading Nigeria’s industrial revolution.
“I am completely blown away with what I saw here today as
this project will reverse the huge sum the nation spends on foreign exchange,”
the AfDB president Akinwumi Adesina had said in January about the Dangote
project. “When you look at how much we import, it is about $57 billion worth of
different products, and we export only about $50.4 billion, so we have to
balance that with about $7 billion.”
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