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CVS pharmacies Chevron and Exxon's Rockefellers State Street andNigeria’s Riches

Aliko Dangote

Aliko Dangote, arguably the richest man in Africa, has plans to build Nigeria’s first privately-owned crude oil refinery while also doubling his cement operations.

Speaking to Reuters, Dangote said that the new plant would cost $12 billion and could produce 650,000 barrels of oil per day. He expects the construction on the new plant to be done by 2018 with production up and running by 2019.

The plant would also include a fertilizer unit to be funded by “loans, export credit agencies and our own equity". Dangote’s also plans to build a gas pipeline through West Africa, and new cement plants in Cameroon, Ethiopia, Kenya, Mali, Niger, Nigeria, Senegal, Zambia and in Congo Republic.

Nigeria had been a major producer in crude oil, but poor refinery maintenance has resulted in its four refineries being unable to hit full output. Currently, the country imports approximately 80 percent of its fuel. Oil companies in the country have staggered under the decline in oil prices, and some have been unable to access cash because the Central Bank of Nigeria has imposed restrictions on foreign currency exchanges in an effort to prop up the sagging naira.

Earlier in the week, the CBN removed the peg that has kept the naira at a rate of 197 for over a year. The naira experienced a 30 percent devaluation as it was traded on the interbank market.

The cash crunch in Nigeria has caused many companies in the country to either go insolvent or make drastic changes, including laying off employees. However, a study done by Reuters during March and May indicated that Dangote’s companies secured a good share of cash at the “cheap official rate.” Dangote downplayed the idea that he had received preferential treatment, and said that the $161 million he bought from the CBN was due to the size of his business.

By Lincoln Brown for Oilprice.com

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