Fidelia Soriwei, Abuja
Aliko Dangote has said his business group is prepared to face legal challenges over its investments in Africa as construction begins on the planned $16bn Dangote refinery in Lamu, Kenya.
Speaking at a fireside chat at the Nairobi Securities Exchange, Dangote also said he was willing to reduce his ownership of the Dangote Petroleum Refinery to as little as 25 per cent if more Africans wanted to acquire shares in the business.
The planned Lamu refinery has a processing capacity of 700,000 barrels of crude oil per day and is expected to be completed by 2030. The project is designed to serve the East African fuel market and support the development of related industries.
Dangote’s comments came amid a legal dispute over the land earmarked for the refinery. The Malindi Environment and Land Court ordered that the existing status quo on the land be maintained pending a hearing scheduled for October 14.
The case was filed by 133 residents of Chandavai in Lamu County, who claim the land is part of their ancestral heritage and has been occupied and farmed by their families for generations. Dangote Group said the order would not stop the planned groundbreaking ceremony, although activities at the site could be affected until the court hearing.
Dangote said his group was accustomed to dealing with legal challenges across the continent and remained confident about the Lamu investment.
“I’m sure some of you must have seen that one court has given an order that we shouldn’t do any construction? I said no, no. This is normal for us in Africa. In fact, this is even small,” he told investors.
He added, “Anyone who wants to cause trouble, we are ready for them,” while citing a previous dispute in Senegal where one of the group’s factories was stopped for a year before the company pursued the matter through the courts.
“In Senegal, it’s not even the court. They stopped our factory for one year. We went up to the Supreme Court to get a judgement. So anybody who wants to cause trouble, we are ready for them,” Dangote said.
The businessman said the Lamu refinery would require more than 60,000 workers during the project and would create opportunities for small and medium-sized businesses around the facility. He also said Dangote Group had already deployed construction equipment to the site.
Dangote further disclosed plans to list the Lamu refinery on the Nairobi Securities Exchange, rather than the Nigerian Exchange, to give more African investors an opportunity to own part of the project.
“If there’s this kind of collaboration, it means that tomorrow, if we are going to have the refinery here in Lamu, it will be listed here in Lamu; we don’t have to list it in Nigeria. We shouldn’t list it in Nigeria. We should list it here,” he said.
He also outlined plans to broaden public ownership of the Dangote Petroleum Refinery. The group initially planned to raise $2.5bn through a private placement and an initial public offering, comprising $1bn from the private placement and $1.5bn from the IPO.
Dangote said demand for the private placement reached $3.7bn before the company proceeded with the planned $2.5bn transaction. He said a further $1.6bn offering was subsequently created to expand ownership among African investors.
“This $1.6bn that we have, I can tell you for nothing that we will sell more. We will go to the regulator and ask the regulator that, ‘Look, there is more demand; we want more Africans to own it ‘. As we go along, we don’t mind, even if Dangote will end up having twenty or twenty-five per cent, we have nothing to hide.”
Dangote said the wider strategy was intended to increase African participation in major businesses while maintaining corporate governance and shareholder oversight. “If we go to an AGM, if we are not doing the right thing, then change the leadership. You can vote us out, and put anything that you think can do better, which I doubt very much,” he said.
