Dangote refinery key to Africa’s economic transformation

With a wobbling Gross Domestic Product (GDP) of $1.8 trillion, countries in sub-Saharan Africa are on the cusp of economic transformation with the imminent coming on-stream of the $12 billion Dangote refinery and petrochemicals complex.

The region is expected to benefit directly from the 650,000 barrels-per-day refinery as the project is expected to drastically reduce fuel imports into the countries in the region majorly from Europe with expected impact on foreign exchange outflows, according to oil and gas stakeholders at this year’s Ghana International Petroleum Conference (GhIPCON) in Accra.
The conference, themed ‘Regional Collaboration: A Catalyst for Transformation’ and organised by Ghana’s Ministry of Energy and the National Petroleum Authority, is designed to actively bring to the fore the operating industry’s perspective and guidance on issues of governmental and regulatory policy, as well as best practices for the advancement of the industry across West Africa.

Sub-Saharan Africa currently boasts of over 132 trillion barrels of proven oil reserves, more than 8 percent of the world’s supply. Yet, it exports most of this oil to overseas refineries. This has for long denied the region of the huge opportunity for economic transformation.
The inability of sub-Saharan African countries to locally refine their oil has taken a huge toll on their economies, with 48.5 percent of the region’s population living below $1.25 per day and life expectancy hovering at 56 years.

However, in this context, the African region, whose economic growth has combined national output equivalent to the GDP of Spain, would be a major beneficiary of the economic transformation arising from the operation of the world largest single train refinery in the world being built in Ibeju-Lekki, Lagos-Nigeria, by Africa’s richest man, Aliko Dangote.

Devakumar Edwin, group executive director, Strategy, Capital Projects & Portfolio Development, said at the conference that the refinery would soon come on-stream to the benefit of the region whose economy had largely depended on imports from Europe and the west, and that the Dangote refinery would foster regional harmonisation in the distribution of cleaner petroleum products in West Africa.

Edwin, who was represented by the technical adviser to the president of Dangote Group on Refinery and Petrochemicals, Babajide Soyode, expressed belief that the completion of Dangote Refinery and other modular refineries projects across West Africa would lead to the integration of the downstream industries and stabilise the prices of petroleum products across the African sub-region.

He stressed the need for other investors in West Africa to emulate the investment drive of Aliko Dangote in the downstream petroleum sector and make the sub-region an exporter of refined products.

Edwin also urged investors in sub-Saharan Africa to take the bull by the horn by investing in the downstream sector.

“If Dangote can do it, any investor can do it. Dangote has not waited for government to regulate the downstream sector before starting the construction of the refinery,” he said.

“We don’t need foreign investors to turn around our downstream sector. African investors should be able to emulate Dangote and revive the African downstream petroleum industry,” he added.

He assured the stakeholders that the refinery is designed to process multiple grades of domestic and foreign crude, which can be converted into high-quality gasoline, diesel, kerosene, and aviation fuels that meet Euro V emissions specifications.