Today, Nigeria is going down in history as President Muhammadu Buhari, in the twilight of his administration, commissions the world’s largest single-train refinery built by Dangote Group in Lagos.
The refinery is not just another project. It is one that bears the hope of everybody including the government in Nigeria as a solution to the country’s seemingly jinxed fuel problem.
Dangote Refinery is a metaphor for the growth of the Nigerian economy. In the country’s energy sector, it is a game changer and a disruptive agent. Expectation is high that this singular project will change lives in families; it will also change the Nigeria story in terms of crude oil exploration and exploitation.
Nigeria has a curious case of being the sixth largest oil producer in the world, producing over one million barrels of this product daily, but not a single barrel of this oil is refined locally today. The crude is exported to where it is refined and the country turns round to import the refined petroleum products.
This importation is one of the greatest undoing of the country’s economy as it comes with the payment of a mind-boggling subsidy to a cartel that does the importation. And the economy bleeds as a result of this, which is why it is hoped that the refinery will end this weird narrative that sounds stranger than fiction.
It may be a bit hard to begin to imagine the size of this audacious project. It may not also be easy to begin to figure out the amount of effort and capital that could have gone into the building of this refinery, which, on its own merit, is a triumph of private enterprise in a free market economy.
However, to get a little sense of how massive this project is, Aliko Dangote, the president/CEO of the Dangote Group, disclosed that the land on which the refinery sits is six times the size of Victoria Island (VI), Lagos.
While VI is 458 hectares, the refinery measures 2,780 hectares and, according to the richest man in Africa, for climatic reasons, they had to raise the height of the land by 1.5 metres and this involved three biggest dredging companies pumping 65 million cubic metres of sand for 18 months.
We salute the Dangote Group for their audacity and courage in embarking on this project, completing it and further raising Nigerians’ expectation on a possible end to the nightmare that fuel scarcity and frequent price hike subject them to on a regular basis.
We also salute the group’s belief and can-do spirit in a country where the business environment actually makes investors grow grey hair even before they start reaping the dividend of their investment.
This refinery, according to reports, is expected to process 650,000 barrels of oil per day, attract foreign direct investment and generate $500 million revenue for the government.
For the group, the project is aimed to be a revenue spinner. According to Dangote, their target is to move the total revenue of the group from $5 billion to $27 billion, which is an equivalent of the GDP of Ghana. That, he explained, would happen when everything about the refinery is done and the group has its own capacity.
We believe that the impact of the refinery located at Lekki Free Trade Zone (LFTZ) cannot be overstated and this is not lost on both the Lagos State and federal governments. Vice-President Yemi Osinbajo affirmed this during a tour of the facility a couple of years ago.
“With the Dangote Refinery and other projects coming on stream, Nigeria still has the potential to play big in the global oil industry,” Osinbajo said, adding that the government was harnessing the potential of the private sector to grow the nation’s economy.
We are gladdened by this realisation in government circles that sustainable growth and development of any economy are only possible when the government recognises private enterprise as an engine of growth. Our hope is that the federal government should go beyond this realisation to provide the enabling environment that would support such enterprises.
We share Dangote’s view that “governments in Nigeria should do more than merely celebrating intentions by private investors to embark on big projects by working with the investors to debottleneck the process of making the big projects come alive.”
Hostile business environment in Nigeria has discouraged and, in some cases, frustrated many private sector operators who, unable to cope with unfriendly regulatory policies, expensive, long and tortuous registration and approval processes in the case of real estate, poor road network, erratic power supply, etc., have dropped investment decisions, leading to losses in terms of revenue to government, job creation, and city development, among others.
Dangote Refinery is an incredible industrial undertaking in the country and the most ambitious in the continent today. In the area of job creation, it is expected that the project will create direct jobs for 135,000 people and indirect jobs for 100,000 others, both of which will have a multiplier effect on the national economy.
Though the decision of the Dangote Group to embark on this project that will have great multiplier effects on the economy of the country is aimed at boosting economic prosperity, it is envisaged that the project will also put Lagos State on an expansive growth.
Read also: 26 things Dangote Refinery wants you to know about its operation
It is hoped that with the entire project in place, especially the gas pipeline, Lagos can run without any interruption in electricity power supply. “It will be as good as living in London where you don’t see power outages. That is because we can supply power from here to anywhere; that means tripling the Gross Domestic Product of Lagos and it will create a lot of economic activities,” Dangote said.
Though residents who live close to the refinery may face environmental challenges arising from the operation of the refinery, the Ibeju-Lekki and Epe axis of the state, which are the project’s catchment areas, have started seeing considerable levels of investment in property for investment, commercial and residential purposes.
Apart from real estate, expectation is that this huge investment would attract other investors to the LFTZ such as ancillary industries that will service the refinery and also businesses such as shopping malls, banks and schools, which will offer services to workers and sundry residents of the free trade zone.
Because of this project, we see Nigeria becoming an industrial haven if only the federal government musters the political will to provide an enabling environment, especially infrastructure, to drive more investments of this magnitude to come into the economy. This, we hope, will change the country’s oil economy story for good. And, hopefully, poverty will give way for prosperity.
