I urge and encourage our other great entrepreneurs to emulate this iconic Nigerian industrialist and join the government in accelerating our growth to realise our country’s globally-recognised economic potential. We must create necessary conditions for our private sector to grow and partner with the public sector to accelerate economic growth across the continent. We must not allow outside powers to use some of our leaders to destabilise our economic and political trajectory – the President, Major General Muhammadu Buhari (retd) at the inauguration of the Dangote Refinery on Monday in Lagos.
After several shifts in the completion date of the 650,000 barrels per day capacity Dangote Refinery and Petrochemical Company, the dream became a reality last Monday when six presidents across Africa and the crème-de-la-crème of Nigeria’s society gathered in Lagos for the inauguration of the largest single-train refinery in the world. This is coming 16 years after the initial setback caused by the Umaru Yar’Adua’s government revocation of the earlier purchased Port-Harcourt and Kaduna refineries by the BlueStar Consortium led by the Africa richest man, Aliko Dangote in 2007. Indeed, dreams die hard!
In their respective goodwill messages, President of Ghana, Nana Akufo-Addo; President of Niger Republic, Mohammed Bazoum; President of Chad, Mahamat Deby. President of Senegal, Macky Sall, and his Togolese counterpart, Faure Gnassingbe, expressed satisfaction that the Dangote Refinery will serve the West African region and that their countries would be beneficiaries. They said Dangote Refinery is an African company for Africa by an African entrepreneur.
The refinery, located in Lekki, Lagos State, can process 650,000 barrels of crude oil per day and produce a range of refined petroleum products, including gasoline, diesel, aviation fuel, and liquefied petroleum gas. The Governor, Central Bank of Nigeria, Godwin Emefiele, said at the inauguration that at the conception of the project in 2013, it was estimated to cost about $9bn but the figure rose with the project completed with a total of $18.5bn and contribution of 50 per cent equity investment by Dangote and 50 per cent funding from banks.
Emefiele further said, in ensuring the successful completion of the project, CBN provided over N125bn to cover the domestic currency requirements of the venture, while also ensuring the availability of foreign exchange to pay for the importation of some of the machinery. He projected that the Dangote Refinery could earn Nigeria foreign exchange savings of between $25bn and $30bn yearly, stressing that the impact of the savings would be directly reflected in Nigeria’s foreign exchange reserves by reducing the pressure on the country’s balance of payments.
Given the processing capacity of 650,000 BPD, the CBN governor said the refinery was more than able to meet all of Nigeria’s domestic fuel consumption, which is about 450,000 barrels per day, while the excess production will be available for export. According to Emefiele, under the incoming administration of Bola Tinubu, Nigeria will cease importing petroleum products, fertiliser and petrochemicals that drained the country of over $26bn in 2022. He opined that the refinery would have an enormous impact on job creation by generating thousands of direct jobs and millions of indirect jobs, with over 135,000 permanent jobs for Nigeria. He also stated that the project would generate up to 12,000MW of electricity.
According to the billionaire businessman, Aliko Dangote, the plant will meet 100 per cent of the Nigerian consumption need of all refined products (gasoline, 53 million litres per day; diesel, 34 million litres per day; kerosene, 10 million litres per day, and aviation jet, two million litres per day) and has a surplus of each of the products for export. He disclosed that 80 per cent of the production can also be discharged through trucks across the country with the first production of the refinery made available by August 2023. Speaking on the benefits of the refinery to the country, he said: “The refinery will make available vital raw materials for a wide range of manufacturers in the plastic, pharmaceuticals, food and beverages, construction and other industries with massive job opportunities.” Moreover, the facility would put an end to the inflow of toxic substandard petroleum products into Nigeria.
It has been estimated that the refinery would add about $21bn (N9.7tn at the current exchange rate) yearly to the Nigerian economy. The facility has 177 tanks with a 4.742 billion-litre capacity, while the temporary housing units on the premises could shelter 33,000 persons.
I totally agree with President Buhari’s submission at the ceremony that: “This feat at this time of the nation’s economic development clearly makes this event a notable milestone for our economy and the game changer for the downstream petroleum products, not only for Nigeria but the entire African continent. Dangote Group has helped transform our economy from heavy import dependence to a net exporter in some critical industries, including cement and fertiliser.”
I watched the inauguration of the Dangote Refinery on Monday and was proud to be a Nigerian. What a feat by a Nigerian! The richest man in Africa and industrialist par excellence! Hearty congratulations to Alhaji Aliko Dangote on this notable achievement. Hearty congratulations also to outgoing President Buhari under whose administration the project was completed and inaugurated. Indeed, all the encomiums showered on Dangote are well deserved.
The inauguration of this gigantic project has however raised a number of posers? Will this project put an end to oil theft? Will it end pipeline vandalism? Will it not cause traffic gridlock in the Lekki–Epe expressway corridor? Will this project facilitate the removal of fuel subsidy? What is the state of the three modular refineries NNPCL claimed had earlier been completed under this Buhari administration? What will be the environmental impact of the refinery on the vicinity of the site as well as the general atmosphere of Lagos State?
I have reflected on the import of the coming on stream of Dangote Refinery and I dare say Nigerians should lower our expectation on the positive rub off of this project. For instance, Dangote Refinery is taking off as a monopoly. The four refineries owned by the government remain comatose after billions of dollars spent on their turnaround maintenance. Even the latest efforts at turnaround maintenance have remained illusory with several shifts announced in the completion date of the Port Harcourt, Warri and Kaduna refineries.
A January 25, 2022 report by spglobal.com, an online medium published that Nigeria’s bid to bolster its local crude refining capacity through the construction of modular refineries in Edo, Rivers and Bayelsa states has run into a hitch due to a number of factors, including funding challenges and rising cases of sabotage attacks on pipelines and oil theft, according to officials familiar with the projects. With no competitor in the immediate period, Dangote Refinery will run as a monopoly and that is not good enough as Nigerians will be forced to buy at whatever price is charged since it’s an inelastic product.
Given the massive pipeline vandalism and industrial scale oil theft in Nigeria I doubt if these twin evils will not affect Dangote Refinery. Furthermore, since our pipelines are routinely vandalised, that means movement of petroleum product from the Dangote Refinery complex will be majorly by trucking, that means there will likely be huge traffic congestion on Lagos Island through to Epe. This has been the sad realities of the Apapa Area residence especially those around Apapa and Tin Can Island sea ports. I wish there had been rail connection from the Dangote Refinery linking the Lagos–Ibadan rail lines.
Anyway, we will continue to bask in the euphoria of having this mega success hoping that all the noble promises in terms of positive impacts on the economy and resolution of the country’s energy crises will come to fruition, in due course.
Twitter: @jideojong
