Nigeria’s business titan and Africa’s wealthiest individual, Aliko Dangote, is confronting a billion-dollar nightmare as he stands perilously close to defaulting on his staggering debts amidst a tumultuous Naira meltdown.
With an overdue biannual payment of $384 million, accumulating over six months until June 30, 2023, Dangote’s financial empire hangs in the balance, raising fears of a cataclysmic default.
Compounding Dangote’s woes is the freefall of the Nigerian Naira’s exchange rate, plunging to 770Naira/1USD under the newly implemented FX regime.
This has transformed the half-year loan repayment, amounting to nearly 295 billion Naira at the prevailing market rates, into an insurmountable mountain.
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Despite seeking leniency through appeals to the Central Bank of Nigeria (CBN) for special rates, Dangote has been met with indifference and directed to navigate the open market in line with the new FX policy.
The dire situation is further aggravated by the ongoing incarceration of the CBN governor by the Department of State Services (DSS) due to a clandestine $1 billion loan from the Afrexim Bank.
Shockingly, it has been alleged that $750 million of this loan was siphoned off to Dangote at concessionary rates to cover previous interest payments, unleashing seismic tremors throughout Nigeria’s financial landscape.
Panic has begun to grip Nigerian banks as Dangote’s imminent default looms large. The gravity of the circumstances is compounded by the hasty commissioning of the incomplete Dangote Refinery in May 2023.
While Dangote’s company has claimed that the refinery would be fully operational by July, industry experts and the Nigerian National Petroleum Corporation (NNPC) have yet to substantiate these assertions.
Nevertheless, the NNPC granted the refinery a substantial crude oil allocation of 300,000 barrels per day, based on their 2021 cash plus crude investment agreement.
Concerns deepen as it remains uncertain whether the Dangote Refinery has truly commenced receiving crude oil since its purported initiation in June.
The predicament has placed the NNPC in a difficult position, with the possibility of 30% of Nigeria’s modest one million barrels per day crude oil production being channeled into a non-operational refinery.
Doubts regarding the status of the refinery were amplified by a recent leaked viral video, posted by refinery construction workers, revealing that the facility is far from completion.
At the helm of the nation’s leadership, President Bola Tinubu confronts the task of determining the fate of this precarious arrangement.
As tension escalates and uncertainty proliferates, the world watches with rapt attention as Dangote’s colossal financial empire teeters on the precipice, poised to reshape Nigeria’s economic landscape in the process.
