Dangote Wants Nigerian Banks to Boost Oil and Gas Funding

Africa’s leading industrialist says domestic banks have held back funding for oil and gas, and calls for investor confidence, more exploration and deeper value addition

Aliko Dangote, president and chief executive of Dangote Industries Limited, has warned that about $7 billion owed to banks by a few oil and gas companies has led domestic lenders to hold back most of their funding for the sector. He called on the Central Bank of Nigeria (CBN) and commercial banks to find a way out.

Dangote spoke at an executive session of the Nigerian Association of Petroleum Explorationists’ conference on Wednesday in Lagos. He told industry leaders, government officials and investors that the credit squeeze was keeping local players from getting the financing they need.

“As some of you may already know, there is currently some tightness in the banking sector when it comes to oil and gas,” he said. “A few companies, I believe, owe the banks about $7bn. As a result, most funding from our domestic banks is on hold.”

He said the CBN and the banks “need to sit down and work out how to unlock the large amount of domestic cash we have, so that we can fund most of our domestic investors.” 

Dangote added that local banks are the better option for Nigerian operators: “It is easier for them to get loans from domestic banks than to go abroad.”

Investor confidence comes first

The billionaire businessman built his speech around three priorities: investor confidence, industrial growth, and the future of Nigeria’s energy value chain. 

Dangote said Nigeria needs a lot more investment to expand exploration, develop new reserves and raise production. To get it, he said, the country must keep strengthening policy consistency, fiscal stability, regulatory transparency and the ease of doing business.

He said recent reforms in the petroleum sector were “an important foundation.” The next step, he said, is to turn them into predictable operating conditions, efficient project approvals and the timely development of discovered resources.

“Capital is mobile, and as you know, the competition for it is very global,” he said. “So let us show that Nigeria is not only rich in resources, but also a dependable destination for long-term investment.”

Beyond crude oil

Dangote urged the country to look past extracting crude. He wants Nigeria to process more of its resources, manufacture more of the goods it consumes, and build industries that can compete in regional and global markets.

He cited the investments in refining, petrochemicals and fertiliser as examples of this “broader industrial vision.” He said each new link in the value chain creates opportunities for businesses, skilled workers, suppliers, transport operators and manufacturers.

He also said one-off landmark projects are not enough. “It requires reliable electricity, modern transport infrastructure, access to affordable long-term capital, strong local supply chains, and a workforce with the right technical skills,” he said. He called on government, financial institutions and the private sector to work together.

More exploration and local capacity

Dangote said exploration is essential to the industry’s future. “We cannot expect to sustain production indefinitely without replenishing reserves, developing new discoveries, and investing in our geological potential,” he said.

He called for more investment in the technical skills of Nigerian professionals and companies so that more work can be done locally. He also urged the industry to adopt technologies that improve subsurface understanding, lower exploration risk and support better investment decisions.

He said success should not be measured by “the number of licences awarded or discoveries announced.” Instead, it should be measured by “the capital deployed, projects completed, production sustained, infrastructure delivered, and value created for Nigerians.”

Dangote said Nigeria has “the resources, entrepreneurial talent, and market potential to build a stronger and more competitive energy industry.” He urged stakeholders to look beyond immediate challenges and focus on the opportunities ahead.