Dangote Refinery gives Nigeria fighting chance of early economic revival 

By Onome Amuge

In a country plagued by an adverse business environment, infrastructural deficit,massive unemployment rate, poor foreign exchange inflow, dismal domestic refinery capacity, the Dangote refinery has been projected to be a game changer to a wobbling economy in dire need of a positive direction.

The recently commissioned  650,000 barrels per day Dangote petroleum refinery, ranked the largest and seventh largest oil refinery in Africa and the world, respectively, is on the trajectory to reposition Nigeria as a leading economy in the world, according to industry analysts.

Interestingly, the world’s largest single-train refinery, pegged at $18.5 billion by the Central Bank of Nigeria, surpasses the $13.5 billion current net worth of the industrialist, who is also Africa’s richest man.

The project is unarguably the most capital intensive industrial venture and largest investment ever spearheaded by  the astute businessman or by any privately owned African company or conglomerate, though it was partly financed by  financial organisations including  the African Finance Corporation (AFC),the African Development Bank (AfDB), Afreximbank, among others who provided 70 per cent of the required finances for the project.

The Dangote refinery is expected to boost domestic refining capacity, reduce import dependency to the barest minimum and promote economic growth by generating foreign exchange for the country through exports.

Notably, the inauguration of the refinery in Lagos, Nigeria’s commercial capital city, had in attendance five African leaders from the West African region including Muhammadu Buhari, the immediate past president of Nigeria, President Nana Addo of Ghana, Macky Sall of Senegal, Faure Gnassingbé of Togo, and Mohammed Bazoum of Niger Republic. Also in attendance were global commodity traders in the oil and gas industry among other international dignitaries.

Aliko Dangote,in his opening address at the event, said the refinery with a current workforce of 33,000 employees, has the capacity to employ over 100,000 Nigerians youths as well as generate over $21 billion annually through the export of refined petroleum products, thereby saving the country huge forex that would have been used for fuel importation.

Speaking further, the industrialist stated that beyond the availability of high-quality fuel for the transportation sector, the refinery will provide raw materials for manufacturers in sectors like food and beverage, plastics, pharmaceuticals amongst other industries.

Dangote also stated that the company’s first goal is to ramp up production of the various products to ensure that within the year, it  is able to fully satisfy the nation’s demand for quality products.

“We decided on a plant designed with state-of-the-art technology and a scale in a capacity that will be a game-changer in Africa and the global market,” he added.

Muhammadu Buhari,who acknowledged the visionary investments made by the Dangote Group, under the leadership of Aliko Dangote, noted that the latter’s  investment in critical industries, such as cement and fertiliser, had played a crucial role in shifting Nigeria from heavy import dependence to becoming a net exporter.

According to Buhari, the mega industry (refinery)  being commissioned is a clear example of what can be achieved when entrepreneurs are encouraged and supported and when an enabling environment is created for investments and for businesses to thrive.

“We recognise that without the active participation of the private sector and a strong commitment to public private partnership, our economy would continue to remain severely challenged and our economic growth impeded,” he said.

The president, therefore,encouraged other great entrepreneurs to emulate Dangote’s industrious drive and join the government in accelerating the country’s growth in order to realise its globally recognised economic potential.

He also advised the new administration to continue to provide an enabling environment and encourage innovative public private partnerships in all sectors of the economy.

Also speaking at the event, Godwin Emefiele, governor of the Central bank of Nigeria (CBN),noted that the newly commissioned refinery will save the country $25 billion to $30 billion in foreign exchange annually. He added that an estimated $10 billion will be earned annually from the exports of refined petroleum products.

The Dangote Refinery complex, located in the Lekki Free Zone area of Lagos State, covers a land area of approximately 2,635 hectares. To put this into perspective, the land size is at least three times larger than Victoria Island, a major business and commercial centre of Lagos State.

Business A.M gathered that the refinery’s 650,000 barrels per day production range, which translates to a total of 103,341,742 litres of refined petroleum product that has the capacity to meet 100 per cent of the Nigerian requirement of all liquid products including petrol, gasoline, diesel, kerosene and aviation jet fuel, with a significant surplus for export.

The Lagos Chamber of Commerce and Industry (LCCI), in a statement, viewed the refinery’s impact on the Nigerian economy as significant,noting that it will create jobs, positively affect the value of the naira, broaden prosperity for the downstream sector, and provide growth opportunities for businesses.

In addition, the chamber expects the refinery to also stimulate economic growth by impacting the country’s balance of payments, save and generate foreign exchange and fuel further growth and development across its value chain, including cosmetics, plastics, textiles, etc.

“We also see room for the development of added value in agribusiness, including the Sugar Backward Integration projects that plan to create a strong localized supply in the sugar industry, benefiting local suppliers across the sugar value chain,” it said.

The LCCI also noted that the initiative presents Nigeria as an attractive investment destination for local and foreign investors. It urged the government to strengthen its commitment to creating an enabling environment for businesses.

In the same vein, the Independent Petroleum Marketers Association of Nigeria (IPMAN), commended the launch of the Dangote refinery, noting that it would play a pivotal role in addressing the country’s fuel import, scarcity issue and incessant price hike.

Chinedu Anyaso, the IPMAN chairman, Enugu depot zone,in charge of Anambra, Ebonyi and Enugu states, described the development  as a breath of fresh air to Nigeria’s energy industry.

They will buy locally, refine and sell locally. We will no longer need forex to import products but rather, it will sell refined products and earn us forex.It is a welcome development,” he said.

Anyaso also noted that the commencement of operations at the refinery would lead to an initial increase in pump price, but would decrease in the long run.

The IPMAN chairman, commended the Muhammadu Buhari administration for signing the Petroleum Industry Act (PIA) which encouraged private sector investment in the oil and gas industry.

Anyaso urged the federal government to resuscitate  its four refineries and optimise their production to support what Dangote would produce, to ensure full sufficiency of the products.

He also cautioned against monopoly, saying it would leave Nigerians worse off if left at the mercy of one supplier.