Why Africa’s Richest Man Spent ₦580 Billion Burning Gas and Coal While Nigeria’s National Grid Kept Collapsing

What happened to Dangote Cement’s energy bill?

In the first nine months of 2026, Africa’s largest cement producer, Dangote Cement Plc, spent a massive ₦580.5 billion ($425 million) just to fuel its factories and run its power plants across Nigeria and nine other African countries. According to the company's unaudited nine-month financial statement, that energy bill grew by 2% from the ₦569.0 billion it spent during the exact same period last year.

Inside Nigeria alone, where the company operates giant cement complexes in Obajana (Kogi State), Ibese (Ogun State), and Gboko (Benue State), the domestic fuel and electricity bill surged by 15.1% to reach ₦313.9 billion ($230 million). To put that number into perspective, Dangote Cement spent approximately ₦1.15 billion every single day in Nigeria just to keep the lights on and the giant cement kilns firing.

Despite this massive payout for fuel, Dangote Cement turned in a remarkable financial performance. Total group revenue rose by 19.6% to ₦3.77 trillion ($2.77 billion), while profit after tax jumped 31% to ₦974.8 billion ($714 million). Because cement prices and total sales volumes grew faster than fuel expenses, energy costs actually took a smaller share of total revenue this year—falling to 15.4% of total sales compared with 18.0% in the previous year.

Why is a cement maker spending hundreds of billions generating its own electricity?

The short answer is simple: Nigeria’s national power grid cannot guarantee steady electricity to heavy industry. A cement factory relies on continuous high-temperature kilns operating at over 1,400 degrees Celsius. If the electric power cuts out unexpectedly while raw limestone is baking inside a revolving kiln, the molten material hardens into concrete inside the machines, causing catastrophic equipment damage and weeks of factory downtime.

Because the national electricity grid experienced multiple total system collapses this year—including major blackouts on 23 January, 27 January, and 19 October—large industrial manufacturers simply cannot connect their primary assembly lines to the public power lines. Instead, they build what the industry calls captive power plants: fully private, off-grid power stations built inside the factory walls solely to feed their own operations.

Dangote Cement operates over 400 megawatts of captive power capacity in Nigeria alone. To put that figure in context, data from the Nigerian Electricity Regulatory Commission (NERC) shows that the entire national grid had an average available generating capacity of just 4,457.96 megawatts in the first quarter of the year. That means Dangote Cement and its major competitor, BUA Cement (which operates about 280 megawatts of captive capacity), generate off-grid electricity equivalent to roughly 14% of the entire power available on Nigeria’s national grid.

What terms should you know to understand this story?

Understanding industrial energy reporting requires breaking down four key financial and power terms into plain language:

• Captive Power Plant: An independent electricity generator built by a business strictly for its own internal use. Captive plants do not feed electricity into the national grid and do not sell power to household consumers.
• Cost of Sales: The direct operational costs involved in manufacturing a product. For a cement company, this includes raw limestone quarrying, fuel and electricity for kilns, packaging bags, and factory worker wages. Energy typically accounts for over 40% of total production expenses.
• Energy Mix: The combination of different fuel sources a factory uses to generate heat and power. Dangote Cement burns natural gas, coal, heavy fuel oil, and crushed cashew shells or palm kernel shells (known as alternative fuels).
• Compressed Natural Gas (CNG): Natural gas compressed under high pressure. Dangote Cement has been replacing costly diesel trucks with CNG-powered haulage trucks to lower logistics costs.

How does an energy bill of ₦580 billion travel to your pocket?

The mechanism connecting a factory’s fuel bill to your everyday finances moves through four direct steps:

1. Fuel prices rise: When global gas prices, local natural gas tariffs, or heavy fuel prices increase, the factory’s daily generation bill rises immediately.
2. Cost of production increases: Every bag of 50kg cement produced carries a direct share of that day’s multi-billion-naira energy spend.
3. Retail prices adjust: To preserve profit margins and service factory construction debt, cement manufacturers adjust ex-factory and retail prices. When fuel costs rise, the retail price of a bag of cement increases across local building material markets.
4. Real estate and infrastructure costs climb: Higher cement prices raise the cost of making concrete blocks, pouring foundations, and building houses, bridges, and drainage channels. Landlords pass these higher construction costs onto tenants through higher house rents, while governments spend more tax money on public works.

How did Dangote Cement keep its energy costs from soaring even higher?

While BUA Cement saw its energy bill jump 21.5% to ₦216.6 billion in the same nine-month period, Dangote Cement kept its group-level fuel cost growth to just 2.0%. According to company statements, management achieved this cost control through three strategic adjustments:

"Management credits a better energy mix, increased substitution of expensive fuels with alternative biomass waste, and expanding CNG-powered delivery truck fleets for keeping fuel and power growth to 2.0% while total cement sales volumes grew 9.4%."

By substituting imported coal and diesel with locally sourced natural gas and agricultural waste—such as sugarcane bagasse and coconut shells—Dangote Cement reduced the foreign exchange hit from imported energy. Furthermore, shifting its massive fleet of heavy transport trucks from expensive automotive gas oil (diesel) to cheaper compressed natural gas (CNG) shielded its distribution budget from soaring pump prices.

What does this tell us about the broader state of Nigerian power?

This huge energy spend highlights a glaring paradox in Nigeria’s economy: the grid is leaving trillions of naira on the table.

If Nigeria’s national grid and regional electricity distribution companies (DisCos) were stable enough to supply heavy industrial clusters, power companies would earn hundreds of billions of naira in guaranteed monthly revenue from creditworthy corporate clients. For instance, BUA Cement’s half-year energy spend of ₦135.4 billion was more than four times the total electricity tariffs collected by Kaduna Electric (₦30.9 billion) over the same period, and exceeded the total revenue collected by Benin DisCo (₦99.9 billion).

Instead, manufacturers are fleeing the grid. The Manufacturers Association of Nigeria (MAN) reports that its corporate members spent ₦1.34 trillion on self-generated power in 2025 alone, up 20.7% from ₦1.11 trillion in 2024. In the first half of 2026, electricity regulators issued 54.94 megawatts of new captive power permits to private factories, commercial centers, and universities—confirming that corporate Nigeria is systematically disconnecting from public electricity.

What is the bottom line for your money?

For the everyday reader, Dangote Cement’s ₦580.5 billion energy bill is a reminder that utility failures act as a hidden tax on every consumer. When public infrastructure fails, private companies build their own mini-utility companies—and buyers pay for that redundancy in every bag of cement, every block, and every square meter of rented space.

Until Nigeria’s power sector reforms deliver reliable high-voltage power to industrial zones, major producers will continue burning billions in self-generated energy. While companies like Dangote Cement have scaled up CNG trucks and alternative biomass fuels to protect their 31% profit growth, everyday consumers will remain exposed to the elevated cost of living driven by off-grid manufacturing.