By Emmanuella Opara | November 6th, 2026
KEY POINTS
- Dangote Industries paid interest rates of up to 40 per cent to local banks while financing its Obajana Cement plant.
- The project cost rose from an initial $180m estimate to $1bn due to infrastructure gaps and operational challenges.
- Dangote said the company eventually secured longer-term financing from the International Finance Corporation.
- He disclosed that the Dangote Petroleum Refinery had reached a capacity of 710,000 barrels per day.
MAIN STORY
President of Dangote Industries Limited, Aliko Dangote, has disclosed that his company paid interest rates of up to 40 per cent on loans obtained from Nigerian banks to finance the construction of its Obajana Cement plant in Kogi State.
Dangote made the disclosure on Thursday at the 25th annual conference of Women in Management and Business in Lagos, where he recounted the financial and infrastructure challenges that accompanied the development of the cement facility.
He said the project, initially estimated at $180m, eventually cost about $1bn after the company encountered infrastructure deficiencies and other operational difficulties.
According to him, Dangote Industries borrowed from local banks when their capital stood at N25bn, but the cost of financing placed considerable pressure on the project.
Dangote explained that the company had initially relied on government assurances that adequate public utilities, including electricity and gas supply, would be available. Consequently, it did not make provision for essential facilities such as gas pipelines, fuel infrastructure and power plants at the beginning of the project.
The absence of these facilities created additional costs and contributed to the increase in the project’s overall expenditure, forcing the company to seek further financing from the International Finance Corporation.
He said the IFC rejected the company’s proposed three-year repayment arrangement after reviewing its financial projections and instead offered a seven-year facility, with no repayments required during the first two years.
Despite the longer repayment period, borrowing from Nigerian banks remained expensive, with interest rates reaching 40 per cent.
Dangote said he eventually invited the bankers to dinner six months before the expiration of the 18-month financing arrangement and settled the outstanding loans.
Obajana, which has become Dangote Cement’s flagship Nigerian facility, currently has an installed production capacity of 16.25 million tonnes per annum across five production lines.
The plant was commissioned in 2007 with two production lines and a combined capacity of five million tonnes per annum. Its capacity subsequently increased to 10.25 million tonnes in 2012, before two additional lines were introduced in 2014 and 2020.
Dangote also recounted the challenges involved in developing the Dangote Petroleum Refinery, saying several international engineering companies and industry players initially doubted the feasibility of the project.
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 about the scale and risks involved.
According to him, some international engineering, procurement and construction contractors declined to participate because they considered Nigeria too risky for the project.
The company eventually assumed responsibility for the engineering, procurement and construction work and completed the refinery, whose capacity has since increased beyond its original design.
Dangote said the facility had reached 710,000 barrels per day, exceeding its initial 650,000-barrel target.
He urged women entrepreneurs to pursue ambitious business goals, establish clear targets and remain confident in their ability to execute large-scale projects.
He also identified inadequate infrastructure as a major constraint to business growth in Nigeria, noting that companies were increasingly required to finance facilities that would ordinarily be provided through public infrastructure.
Dangote further encouraged entrepreneurs to remain resilient when confronted with setbacks, describing difficulties as part of the process of building businesses and undertaking industrial investments.
He also said the Dangote Petroleum Refinery was expected to record the highest profitability on the African continent within 55 days, adding that profitability remained the company’s immediate priority.
Earlier, Founding Chairperson and Trustee of WIMBIZ, Omobola Johnson, reflected on the organisation’s 25-year history, highlighting the importance of inclusion, mutual respect, shared leadership and succession planning in sustaining institutions.
Johnson said the organisation had challenged the perception that women could not work together, noting that its founders had maintained a common vision despite differences in personal interests and ethnic backgrounds.
THE ISSUES
Dangote’s account highlights the financial burden that high borrowing costs and inadequate infrastructure can place on large industrial projects in Nigeria.
The Obajana experience illustrates how gaps in public utilities can increase project expenditure, forcing businesses to invest additional capital in facilities required to sustain their operations.
For manufacturers and other capital-intensive businesses, the cost of financing such investments can also affect project timelines, profitability and the ability to expand production capacity.
WHAT’S BEING SAID
“You won’t believe how much interest we were paying when we built Obajana (Kogi State, Nigeria),” Aliko Dangote, President and Chief Executive of Dangote Industries Limited, said.
“We countered the fallacy that women cannot work together. We have worked together for 25 years, and we have built an institution that has endured, stood the test of time,” Omobola Johnson, Founding Chairperson and Trustee of WIMBIZ, said.
WHAT’S NEXT
Dangote said the immediate priority for the petroleum refinery was profitability, adding that the facility was expected to achieve the highest profitability on the African continent within 55 days.
BOTTOM LINE
The Obajana project demonstrates the financing and infrastructure difficulties associated with building large-scale industrial facilities in Nigeria, while Dangote’s account highlights the high cost businesses can incur when they rely on expensive domestic credit and provide essential infrastructure themselves.
