Dangote Reveals He Paid 40% Interest to Nigerian Banks While Building Obajana Cement Plant

Nigerian billionaire businessman Aliko Dangote has revealed that his company paid interest rates as high as 40 per cent to local banks while financing the construction of its Obajana Cement plant in Kogi State.

The disclosure offers a glimpse into the high cost of borrowing that Nigerian businesses have had to contend with, particularly when financing large-scale industrial projects.

According to Dangote, the company had to secure funding from local financial institutions at extremely high interest rates during the construction of the Obajana Cement plant, highlighting the financial challenges involved in building major industrial infrastructure in Nigeria.

The Obajana facility, located in Kogi State, is one of the country’s major cement manufacturing plants and an important part of Nigeria’s domestic cement production capacity.

Dangote’s revelation has also brought renewed attention to the cost of accessing credit in Nigeria, where high lending rates have continued to put pressure on businesses seeking funds for expansion, investment and infrastructure development.

For manufacturers, borrowing costs can significantly affect production expenses, investment decisions and the prices of goods in the market. Companies undertaking capital-intensive projects, such as cement production, often require substantial financing over several years.

The businessman’s comments also highlight the difficulties local investors may encounter when attempting to build large industrial facilities using domestic financing.

Despite the high borrowing costs disclosed, the Obajana Cement plant went on to become a major industrial asset, contributing to Nigeria’s cement manufacturing sector and the broader industrial economy.

The revelation has once again raised questions about the affordability of bank loans in Nigeria and the role of accessible long-term financing in supporting local industries.

For businesses looking to invest in manufacturing and other capital-intensive sectors, the cost of borrowing remains a major factor that can determine whether projects move forward or remain on paper.