President Muhammadu Buhari Monday inaugurated Dangote Petroleum Refinery in Ibeju-Lekki, Lagos, which is expected to enable Nigeria to achieve self-sufficiency in refined products and even have a surplus for export.
Speaking at the occasion attended by Heads of State from Ghana, Togo, Niger, Senegal and a representative of the President of Chad, the President described the feat as a significant milestone for Nigeria’s economy and a game changer for the downstream petroleum products market in the entire African region.
‘‘This mega industry we are commissioning today 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.”
The President who commended Alhaji Aliko Dangote’s leadership in executing the 650,000 barrels per day refinery urged other entrepreneurs to emulate his example in driving economic growth and realizing Nigeria’s economic potential.
He stressed the need for African countries to come together, integrate their economies, eliminate trade barriers, and rally their populations to achieve Agenda 2063 for the continent’s prosperity.
‘‘I urge and encourage our other great entrepreneurs to emulate this iconic Nigerian industrialist and join the Government in accelerating our growth in order to realize our country’s globally recognized economic potential.
Consequently, the Governor of the Central Bank, Godwin Emefiele disclosed that the Central Bank of Nigeria supported the Dangote Refinery with N125 billion domestic currency cover and another N75 billion loan facility which was facilitated through some selected Nigerian banks.
Emefiele disclosed this on Monday at the event marking the commissioning of the Dangote refinery in Lagos.
“In September 2013, when Alhaji Aliko Dangote announced his plans for the refinery, it was estimated to cost about US$9 billion, of which US$3 billion was projected as equity investment by the Dangote Group and the balance financed through commercial loans.
“Due to an array of factors, the project was eventually completed with a total of US$18.5 billion with funding distributed into 50 percent equity investment and 50 percent debt finance. I am proud to state that the commercial loan component of the project was financed majorly by our domestic banks with the balance sourced from foreign banks.
The Central Bank of Nigeria also partnered, as always, with the Dangote Group in ensuring the successful completion of the project by providing about N125 billion, to cover domestic currency requirements for the venture,” Emefiele explained.
Facility to save Nigeria $25bn Forex
Meanwhile, the CBN governor has noted that the Dangote refinery would be a major boom for Nigeria’s FX reserves, as it would save $25 billion in Nigeria’s FX needs, due to an end to energy imports and provide $10 billion in exports.
He stated that if Nigeria failed to find savings for its energy imports, Nigeria’s import costs would have risen to $30
Emefiele said, the takeoff comes with economic benefits, generating over 135 thousand permanent jobs and also 12MW of electricity, as the project gives us significant savings and easing fiscal burden, “
He added “30% of Nigeria’s FX requirements went to fuel imports, it is instructive to note, that according to the balance of payments, it doubled from 8.4$ billion in 2017 to $23.3 billion at end of 2022,
“Average annual costs of petroleum imports could reach $30 billion by 2027, if we continue to rely on imports. The refinery will serve over $25 billion in foreign exchange savings, and benefit an extra $10 billion through exports of refined products,”
He also noted that by 2017, costs of the refinery has escalated from $9 billion to a cost of $18.5 billion with 50% equity investment by Dangote.
He noted that the Dangote group has paid down some portion of commercial loans before the commission, as of today, and the total loans outstanding has dropped from over $4 billion to $2.7 billion,
Gains of Refinery
He added that the development also heralds an accomplishment for Nigeria’s industrialist and Dangote group, as well as Nigeria and the continent of Africa,.
“Today history is being rewritten for Nigeria trajectory for greater growth and prosperity, alongside the petrochemical plant.
“The unwavering commitment in completing the project, notwithstanding various challenges exemplifies efforts to build a more productive economy.
“This complex comprises a refinery, a petrochemical plant, and a urea fertilizer project, capacity to produce 3 million MT of urea annually, its flagship project, the refinery to produce 650 thousand BPD, is the largest single train in the run, including processing capacity, more than able to meet all of Nigeria’s domestic consumption and generate export revenue,” Emefiele further stated.
Venturing into the petroleum sector began two decades back – Dangote
Speaking during the Commissioning, Dangote said the desire to go into the petroleum sector began two decades ago, adding that the intentions were met with setbacks.
He, however, expressed joy that the project had finally come to reality.
He added that President Muhammadu Buhari encouraged him not to give up on establishing the refinery.
Dangote Refinery and Petrochemicals is the world’s largest single-train refinery and the biggest in Africa
“Mr. President, Distinguished Guests, the journey to this event was long and arduous. It could not have been possible without the support and collaboration of many parties and individuals.
“So, permit me your excellencies, distinguished guests to recognize and appreciate just a few.
“Let me start with Your Excellency, Mr. President. Your sustained support and encouragement over the past eight years have been, for me personally, a source of great motivation and strength. At times when I felt like giving up, your confidence and quiet words of assurance have made the difference. Mr President, I thank you from the bottom of my heart.” Dangote said.
Dangote also thanked the Lagos State government, starting from the era of President-elect Bola Tinubu, who governed Lagos between 1999 and 2007, till incumbent Governor Babajide Sanwo-Olu.
“Those like me, who have made Lagos our home will testify that since the beginning of the current democratic dispensation, the government of Lagos State has been exceptionally remarkable in its commitment and support for the private sector.”
Source: Daily Trust and Daily Independent