President of Dangote Industries Limited, Aliko Dangote, has revealed that his company paid interest rates as high as 40 per cent to Nigerian banks while financing the construction of its Obajana Cement plant in Kogi State.
Dangote disclosed this on Thursday at the 25th annual conference of Women in Management and Business (WIMBIZ) in Lagos, where he encouraged women entrepreneurs to venture into large-scale industrial investments.
Recounting the financial challenges encountered during the construction of the cement plant, he said the project was initially estimated at $180m but eventually cost about $1bn due to infrastructure deficiencies and operational difficulties.
According to him, the company initially relied on government assurances that adequate electricity and other essential infrastructure would be available, leaving it without critical facilities such as gas pipelines, fuel installations and power plants.
The situation created additional financial pressure, forcing the company to seek more funding, including support from the International Finance Corporation (IFC).
Dangote explained that the IFC rejected the company’s proposed three-year repayment plan after reviewing its financial projections and instead offered a seven-year arrangement, including a two-year grace period.
He said borrowing from local banks remained particularly expensive, with interest rates reaching 40 per cent.
The industrialist recalled that he eventually invited the bankers to dinner six months before the expiration of the 18-month financing arrangement and presented them with cheques to settle the outstanding loans.
Obajana, which serves as Dangote Cement’s flagship Nigerian facility, has an installed production capacity of 16.25 million tonnes annually across five production lines.
The plant was commissioned in 2007 with two production lines and a combined capacity of five million tonnes per annum. Additional production lines were introduced in 2012, 2014 and 2020 to expand its capacity.
Dangote also recounted the challenges involved in constructing the Dangote Petroleum Refinery, saying several international engineering companies initially doubted the feasibility of the project because of perceived risks associated with operating in Nigeria.
He said the company initially planned a refinery with a capacity of 300,000 barrels per day but later increased its target to 650,000 barrels per day despite concerns from industry players.
According to him, some international engineering, procurement and construction contractors declined to participate, forcing the company to assume responsibility for the engineering and construction process.
He disclosed that the refinery’s capacity had since exceeded its original design, reaching 710,000 barrels per day.
The billionaire businessman urged women entrepreneurs to think ambitiously, set clear business targets and remain confident in their ability to achieve them.
He also identified inadequate infrastructure as a major obstacle to business growth in Nigeria, noting that companies were often compelled to provide facilities that should ordinarily be supplied by the government.
Dangote further encouraged business leaders to remain resilient in the face of challenges, describing perseverance as essential to achieving major industrial investments.
He added that the Dangote Petroleum Refinery was expected to record the highest profitability on the African continent within 55 days.
Earlier, the Founding Chairperson and Trustee of WIMBIZ, Omobola Johnson, reflected on the organisation’s 25-year journey, highlighting its commitment to promoting women’s participation in business and management.
Johnson said the organisation had endured through inclusion, shared leadership, mutual respect and effective succession planning.
