Six businesses Dangote shut before building his $20 billion refinery

Aliko Dangote built his $20 billion refinery after costly exits from several businesses. The $1.6 billion Dangote Refinery initial public offering has attracted interest from Nigerian retail investors and international institutions. The 700,000-barrel-per-day facility is valued at about $47.6 billion. Dangote’s fortune is now estimated at $51.3 billion.

Over the decades, Africa’s richest man entered textiles, banking, telecommunications, aviation and food processing. Several of those ventures were later closed or sold.

Textiles: the biggest mistake

Dangote invested in Dangote General Textile Mills and acquired the foreign shareholder in Nigerian Textile Mills, established in 1960 for the Western Region under Chief Obafemi Awolowo. Cheap imports, unreliable electricity, high operating costs and competition from Chinese and Indian products made the factories difficult to sustain.

“My biggest business mistake was textiles,” Dangote said.

The closures affected nearly 8,000 workers, including 6,920 employees at Nigerian Textile Mills in Ikeja. Many had worked there for between 25 and 30 years. That left substantial pension and gratuity obligations.

Flour, telecoms, tomato and aviation

Dangote Flour Mills was established in 1999 and listed in 2008. In 2012, Dangote sold a 65% stake to Tiger Brands for about $200 million. Tiger Brands struggled and exited. Dangote bought the business back at a lower price. He later withdrew again, citing foreign-exchange challenges. In 2019, Olam acquired Dangote Flour Mills for ₦120 billion and integrated it into Crown Flour Mills.

In telecommunications, the group reportedly paid about $20 million for a licence and planned to challenge MTN, Glo and Airtel. Internal disagreements, regulatory delays and the cost of building a nationwide network stopped the project. Dangote abandoned the venture.

Dangote’s tomato-processing factory opened in Kano in 2016 with capacity to process 1,200 tonnes of fresh tomatoes daily. It was expected to cut Nigeria’s dependence on imported tomato paste and give farmers a reliable market. It repeatedly closed because of inadequate supplies and high operating costs. By 2021, Dangote said farmers supplied only about 20% of the plant’s capacity, and the investment had barely generated a profit.

In 2002, Dangote partnered with Sam Iwuajoku and Seaside View Management to establish Executive Jets Services. The company started VIP charter operations with a nine-seat Hawker Siddeley aircraft and planned to expand into passenger services. Operational difficulties made the aviation venture short-lived.

Liberty Bank exit and refinery contrast

Dangote ultimately sold Liberty Merchant Bank for ₦1.2 billion to meet obligations from the textile closures.

“By the time we sold Liberty, I cashed out N1.2 billion,” he said. “The industry consumed N985 million to pay pensions and gratuities just to get out of the business.”

Dangote said the experience showed the group had “burnt our fingers.” That contrasts with the refinery success now at the centre of his industrial empire.

For Nigerian businesses, the record shows that even large industrial bets can fail on power, imports, regulation and operating costs. The refinery’s scale, at 700,000 barrels per day, now carries the group’s industrial ambition.