Hard hit by sliding foreign exchange earnings, policy makers in Africa’s largest economy have signalled their commitment to suppress Nigeria’s importation bill and engender private investments, following its unique interest in the success of the 650,000 barrels per day (bpd) Dangote Refineries.
Analysts say the weight of government officials that were present at the weekend tour of the refinery, underlie the importance of a functional refinery to the Nigerian economy, and it is certain to attract local and foreign investment to the downstream petroleum sector.
“Nigeria’s demand for petroleum products amounts to roughly 70 litres daily, importing this costs us about $12 billion,” an energy analyst disclosed.
“By mere fact that Dangote is widely perceived as a good investor following his stint with cement, he may have laid an antecedence for other investors to follow. Government’s support also allays the uncertainty that trails our investment space, this is good news for private investors,” the analyst said.
At the tour, Vice President Yemi Osibanjo says the Federal Government is harnessing the potential of the private sector to grow the nation’s economy, citing the 650,000-barrel per day Dangote Refinery, expected to come on stream by first quarter of 2019, as one example.
Osinbajo was in Lagos at the weekend, on a tour of the ongoing construction of major projects being undertaken by the Dangote Group at the Lekki Free Trade Zone (LFTZ), including the refinery, fertilizer plant and gas pipeline production plant.
According to the Vice President, who was accompanied by Lagos State governor, Akinwunmi Ambode, ministers of finance, Kemi Adeosun; power, housing and works, Babatunde Fashola, and solid mineral, Kayode Fayemi, with the Dangote Refinery and other projects coming on stream, Nigeria still have the potential to play big in the global oil industry.
“This is the largest industrial undertaking in Nigeria. Here we have seen the refinery, which is meant to refine 650,000 barrels of oil per day, which by all projection is the largest in the world. There is also the petro-chemical and fertilizer plant, which are also projected to be the largest in the world.
“There is also a pipeline production plant here. I think it is an incredible industrial undertaken in the country and most ambitious in the continent today. It is really inspiring,” Osinbajo said.
Meanwhile, the Federal Government is projected to earn about $500 million in three years from taxes and royalties when the 650,000bpd refineries come on stream with petrochemical plant in 2017, gas project in 2018 and refinery in early 2019.
“This is incredible if that can be done because it would be a major strategic asset for Nigeria. It would boost our power supply tremendously,” the Vice President said.
Ambode and Aliko Dangote spoke about the projects and their potential for the economy in terms of job creations, GDP and revenues for both Lagos and the Federal Government, saying they would be aiding the quick recovery of Nigeria’s ailing economy.
According to Ambode, the decision of the Dangote Group to embark on four significant projects that will have great multiplier effects on growth and economy of Nigeria is aimed at boosting economic prosperity of the country.
“What this tells us is that Lagos is on an expansive growth, both on the east and west sides of Lagos. There is nothing we can do as a government than to commend Alhaji Aliko Dangote and thoroughly support him.
“You can just visualise what that means to the economy of Lagos. Direct job created here is 135,000 people and indirect jobs 100,000 people. The income that will be generated to the Federal Government in the next three years is over $500 million. This is from a single individual,” he said.
On why Lagos was chosen as the location for the projects, Aliko Dangote cited investor-friendly policy, saying, “By the time that we finish these investment, especially the gas pipeline, a state like Lagos can run without any interruption of electricity power supply. It will be as good as living in London where you don’t see power outage. That is because we can supply power from here to anywhere. . That means tripling the Gross Domestic Product of Lagos State and it will create a lot of economic activities.”
He expressed the optimism that his huge investment would attract other investors to the LFTZ.
