Dangote to Stop Sourcing Forex from CBN

In line with its business expansion blueprint, the Dangote Group, on Thursday, said it was diversifying into the steel sector due to the enormous potential it holds.

The company also said it would soon wean itself off the Central Bank of Nigeria’ (CBN) foreign exchange support to run its businesses.

The Group Managing Director of Dangote Group, Mr. Olakunle Alake, made the disclosure at a panel discussion at the Infrastructure Solutions Summit organized by the African Finance Corporation (AFC).

Penultimate week, the federal government hit the brakes in completing the multi-billion dollar Ajaokuta Steel Company and said it would outsource it to a private investor on a concession arrangement.

He said: “Apart from the oil and gas project that we are doing, we are also one of the key stakeholders that has supported the government in terms of infrastructure tax credit scheme and we are using local banks to build that capacity across Nigeria.

“We do have something right now that we are trying to complete. I think this is the major project and that is our major focus right now. In another couple of years, we will not go to the Central Bank for foreign exchange for any of our activities, because at the end of the day, it’s a double situation, you import products which means you are creating jobs outside Nigeria and you struggle to get the FX.

“You drill for oil, you export oil, you don’t refine it. That way you are just killing employment. Our focus is two things. One, we make sure we look at things that can be produced locally, we create employment that way and we create value that way.

“For us, steel is one of the key areas. You recall that years back, the government decided that steel was major and set up Ajaokuta Steel and Delta Steel.”

In his address, the Chairman of the AFC Board and the Deputy Governor (Economic Policy) of the Central Bank of Nigeria, Dr. Kingsley Obiora said that energy and infrastructure were highly important to the growth of the continent.

According to him, “Climate Change demands greater robustness in our buildings and infrastructure and as energy transition requires rethinking of power supplies, transportation and living.

“The key is unlocking new sources of funding both international and domestic. Be assured such capital is available. It is locked in pension funds, insurance companies, sovereign wealth funds and mutual funds. We are limited only by our ability to reduce risk for investors and provide stable, steady and competitive returns.”

“In fact the reason that we are all here today brought together by the African Finance Corporation is a case in point. The CBN deployed an initial $500m in investment in AFC.

“15 years on, the corporation has a balance sheet of over $10bn in investments in 35 countries. Last year, the CBN together with the AFC and the Nigerian Sovereign Investment Authority under our Vice President launched the Infrastructure Corporation of Nigeria, focused on a world class infrastructure development vehicle focused on tackling Nigeria’s $100bn annual infrastructure needs.”

Also speaking, the Chairman of Transcorp Group, Mr Tony Elumelu canvassed strongly for the decimation of the insecurity monster currently ravaging the Niger Delta, which has found expression in the unprecedented level of oil theft that has fractured the nation’s economy.

Elumelu said insecurity was a total disincentive for foreign investors needed to steer the nation’s ship from the tempest to calmer waters.

May 13, 2022