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Dangote: With new refinery, we’ll boost Nigeria’s economy by $20billion

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Nigeria may take a breather from the twin issues of crisis in the production and distribution of petroleum products and rising cost of dollars, if the words of Aliko Dangote, Africa’s richest man, who promised to tackle them, become real.

Dangote, owner of the Dangote Refinery, Nigeria’s first private initiative in processing crude on a large scale and Africa’s largest in terms of capacity, was quoted as saying that with the planned commencement of the refinery located in Lagos, Nigeria could save up to $10 billion in foreign exchange (FX) and generate another $10 billion in exports when the facility begins operation.

The 650,000 barrels per day, also reputed to be the world’s largest single-train refinery, is set for inauguration on May 22, by President Muhammadu Buhari.
The business magnate, who spoke in an interview with a special edition of London-based The Economists Magazine, entitled: The World Ahead 2023which was unveiled with considerable focus on West Africa and aimed to highlight both the potential as well as areas for improvement in Africa, was quoted as saying Nigeria currently imports over 90 per cent of its refined petroleum products, which amounted to roughly $10 billion in imports in 2022.

While this has brought major benefits to many businesses, Dangote explained that more prosperity could be created by locally refining Nigeria’s resources, with the refinery being a major step in this direction by reducing the country’s dependence on imported refined petroleum products.

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“The refinery’s completion will not only create direct and indirect jobs, but also lead to skills transfer and technology acquisition opportunities that will benefit the downstream sector.

“Moreover, the refinery’s production of critical products like naphtha and polypropylene will stimulate the development of other industries, such as cosmetics, plastics, and textiles. Refineries on this scale could save Nigeria up to $10 billion in foreign exchange and generate approximately $10 billion from exports.

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“We see room for development of added value in agribusiness too. Here, initiatives like our Sugar Backward Integration Projects look to create a strong localised supply in the sugar industry. With a goal to produce around 0.5 million tons of sugar per annum from locally grown sugar cane, benefits will be created across the sugar value chain for local suppliers,” he added.

He noted that the soon-to-be commissioned 650,000 barrels per day refinery in Lagos, would enable Nigeria achieve self-sufficiency in refined petroleum products, as well as export to other African markets.

According to him, there are also ample opportunities to increase the country’s rice production, with the ongoing construction of six rice mills that could mill approximately one million tons per annum of locally produced rice, thereby empowering local farmers.
The renowned businessman pointed out that the group of companies also has a 2.8 million tons per annum fertiliser plant tapping into the fertiliser market, while opportunities are being explored in tomato cultivation and processing as well as dairy production.

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“With many parts of West Africa still facing food insecurity, the emergence of strong localised industries with resourceful suppliers and clear trade networks will be a big step in the right direction,” he maintained.

Dangote stressed that Nigeria presents an attractive investment opportunity for international investors, saying with the country’s abundance of natural resources, diversifying and digitising economy, youthful demographics and vibrant society, investors will find in Nigeria a country of many possibilities.

“Its population of over 200 million — of which 40 per cent is under the age of 15 – means the country’s demographic dividend offers investors with a long-term view an encouraging option in several sectors.

“Nigeria has a variety of untapped natural resources which, for commodity-driven investors, offers options in the upstream, midstream, and downstream segments. Its vast arable land and favourable climatic conditions similarly support a wide range of crops, positioning it as an auspicious destination for agriculture-based investments.

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“Here, we expect to see the development of a strong, home-grown agribusiness industry. We are also seeing the emergence of a strong digital economy, with several Nigerian start-ups becoming vibrant players in their respective tech-fields.

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“Nigeria’s import dependency and reliance on foreign markets presents major prospects for import substitution and supply chain localisation. Across various consumer-goods sectors of the economy, as well as supply-side needs for commercial and industrial enterprises, there are different options to set up localised supply networks,” he argued.

With the conclusion of the recent elections, Dangote explained that he was looking forward to government taking proactive steps to enable and empower investment by the private sector as the country has a variety of opportunities for businesses to work alongside the government through Public-Private Partnerships (PPP) in infrastructure development.

On opportunities provided by the Africa Continental Free Trade Agreement (AfCFTA), Dangote stated that the initiative has the strong support of many businesses across Africa with different private sector leaders actively involved in the process leading up to its signing and ratification.

Within the context of manufacturer’s associations and industrial groups, which he said he participated in, Dangote explained that he saw the willingness of African governments to engage with the private sector so they can hear what ingredients are needed to unlock increased intra-Africa trade.

In looking to opportunities for exports from a strong base such as Nigeria, the cement industry, he said, could benefit greatly from not only exporting cement to burgeoning construction markets across the continent, but could look to build cement plants in other markets.

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Driven by population growth, urbanisation, infrastructure development, and housing demand, he noted that Africa’s cement consumption has considerable room for growth as evidenced by its per-capita cement consumption of 130kg, far behind the global average of 541kg.

“Sub-Saharan Africa presents an opportunity for expansion, as its population is projected to grow from 1.1 billion to over 2.1 billion by 2050, with two thirds of this growth in urban areas. Nigeria currently has an installed cement production capacity of about 54m tons/pa, which exceeds local demand and so a lot of this can be exported across Africa.

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“Governments and businesses need to work together to improve competitiveness, dismantle barriers to accessing markets and develop supportive industrial policies. It is also important for countries to understand the potential revenue loss from the elimination of tariffs and develop strategies around tariff revenue gaps.

“Additionally, effective monitoring and enforcement of rules of origin is essential to ensure that products traded within the market originate from within the continent. By forging partnerships, businesses and governments can collaborate to overcome these challenges and maximise the potential benefits of initiatives like AfCFTA,” he explained.

As a key player in Africa’s push towards self-sufficiency in the cement industry, he disclosed that the group has an installed production capacity of approximately 51 million tons per annum across 10 African countries.

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In addition, he noted that the group’s newly inaugurated urea plant in Lagos, with a capacity of 2.8 million tons per annum, not only ensures a secure supply of fertiliser for Nigeria, but also allows for exports.

On climate change, Dangote said businesses should actively look to integrate sustainable practices throughout their operations while embedding an awareness among staff of how business activities impact the socioeconomic realities of stakeholders.

By prioritising energy efficiency, water conservation, waste management and emissions control, he posited that companies could look to alternative fuel sources, energy-saving initiatives and waste management protocols as easy wins to benefit stakeholders.

Expressing his views on expectations for the creation of value-added industries in Africa, the richest black man in the world stated that Nigeria’s economy as presently constituted has largely been built around the extraction and exportation of its natural wealth.

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Tough economy: Trouble in APC, as staff plan strike

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A loud grumbling has enveloped the 40 Blantyre Crescent, Wuse, Zone 2, Abuja, headquarters of the All Progressives Congress (APC), where staff across different departments are threatening to down tools in protest of poor welfare and biting economic hardship.

Daily Trust, is reporting that the staff are specifically asking the party’s top echelon to make provision for their housing and other allowances, stressing that the economic situation of the country had become quite unfavourable to them.

The paper quoted one of the staff, who spoke on condition of anonymity, as saying that the party’s executive members had left them to suffer, while taking home humongous amounts of money as salaries and allowances.

Though Abdullahi Umar Ganduje, National Chairman of the party, is said to have commenced payment of N35,000 provisional wage award to them in January 2024, they argued that the largesse would in June, and they would be back to square one and therefore, they needed more stable welfare packages.

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In a swift riposte, Felix Morka, spokesman of the party, was quoted as dismissing the agitation, saying: “Those matters I don’t really discuss them. As you can see, there are many important things to discuss; at the national level, in Edo State. We are battling with all that. So, any in-house matters are not my focus right now.”

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BREAKING: Davido ups the ante, doles out N300million to orphanages

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David Adeleke Nigerian music sensation, otherwise known as Davido is stamping his giant feet with which he has mesmerised his audience across the world in the arena of philanthropy, with an announcement of a fresh donation of a whopping N300million to some orphanages across the country.

The latest is an increase of N63million up from the N237million the popular singer, who disclosed the largesse in a statement on his social media accounts on Tuesday, dolled out last year as part of the gesture in what is now turning out a yearly programme since it started a few years ago.

The gesture is coming at a time Nigeria is under an intense weather of deprivation and poverty, with the prices of food and other commodities hitting the roof and citizens, unable to afford basic items mostly going to bed on empty stomachs as a result.

In recent weeks, demonstrations had erupted in many parts of the country, including Niger, Kano, Ogun and Oyo States, where residents trooped into the streets to demand an end to the parlous situation, which they blamed on the insensitive policies of the government of Bola Tinubu, the Nigerian President.

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The singer, who first gave out N250m to 292 orphanages in October 2022, said the this year’s donation would be done through The David Adeleke Foundation (DAF), adding: “I and my foundation pledge the sum of 300 million Naira to orphanages around Nigeria … as my yearly contribution to the nation. Details of disbursement tomorrow.”

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BREAKING: Tinubu set to probe Buhari’s N23trillion Ways and Means debt

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At last, President Bola Tinubu, may be going through the N23trillion Ways and Means debt obtained by his predecessor, Muhammadu Buhari, with a fine comb to determine what the funds, which is attributed to a major part of the current debt overhang in the country, went into.

The Nation, quoted Wale Edun, Minister of Finance and Coordinating Minister for the Economy as revealing this much to participants at the ongoing Public Wealth Management Conference organised by the Ministry of Finance Incorporated (MoFI).

Besides, the Minister reportedly said the Federal Government would also present a bill to the National Assembly, soon to authorise the removal of “all taxes and levies that constitute nuisance from the country’s tax system, as a measure to wean itself from future Ways and Means indebtedness.

The government, Edun added, will vigorously pursue policies that will allow it harvest revenue in real time from Government Owned Enterprises (GOEs) and Corporate entities.

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It was also on the same day that the Minister explained that Tinubu’s administration inherited a surge in food and general commodity prices from the previous government, but emphasised the government’s commitment to reducing food prices and tackling the nation’s high inflation rate.

Outlining the measures government was taking in tackling the situation, he revealed that, the government had released 42,000 metric tons of grains, with an additional 60,000 metric tons scheduled for release soon.

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