Alh. Aliko Dangote, President, Dangote Group, is at the centre of Nigeria’s import substitution strategy. Removal of the heavy weight of importation of refined petroleum products on the foreign exchange market is a key target presently for rebuilding foreign reserve and restoring stability to the foreign exchange market. Government’s objective is to cut products importation by 70% – which is expected to be achieved by raising local petroleum refining capacity.
Dangote is moving well ahead of the government’s planned reduction in importation of refined petroleum products and is looking forward to replicating in the petroleum sector the feat he has accomplished in cement manufacturing. In 2014, he began the development of a massive, 650,000 barrel-per-day refinery that represents hope for a permanent solution to the nation’s lingering energy crisis.
Nigeria requires 445,000 to 550,000 barrels of fuel daily and the country’s four state-owned refineries, operating at a fraction of installed capacities, offer no solution in site. Dangote’s refinery and petrochemical plant has the capacity to meet local demand for fuel fully with spare capacity for export. The prospects for turning Nigeria from one of the largest importers of refined petroleum products to a net exporter of fuel in two years or so represent light at the end of a long tunnel for a nation that has suffered one of the world’s worst energy crises for several decades.
Mechanical completion of Dangote refinery project, said to be the largest single train refining plant in the world, is expected by the end of 2018 and commissioning is planned for 2019. The refinery is being developed on a 2,135 hectare ground on the outskirts of Lagos. Three single point mooring buoys on the Atlantic Ocean will bring in the crude, which will be delivered to the plant through a 20km pipeline.
The refinery is not limited to Nigerian crude but is designed to process all African crudes. The plan is to build in flexibility that minimises risks of supply disruptions and ensures operating stability.
Dangote is also taking steps to play a major role in the work government plans to do across the various value chains towards achieving self-sufficiency in food production. He is looking forward to commissioning a three million tonne per annum ammonia fertilizer plant in 2018. Construction work on the 300-hectare fertilizer site has reached an advanced stage.
Nigeria has been importing fertilizer while key ingredients like urea and limestone are readily available locally. President Muhammadu Buhari lamented the abandonment of local fertilizer blending plants in his 2017 budget speech and promised to revive the blending plants. Dangote’s fertilizer production project fits into the government’s plan, which promises to save Nigeria $200 million in foreign exchange and N60 billion in subsidy annually and create thousands of jobs.
Nigeria is known for its high rate of abandoned projects, which is particularly the case in respect of development of private refineries. Of all the private refinery licences granted, none eventually took off. There is however great confidence on Dangote to complete his massive refinery and fertilizer projects, which reflects his demonstrated ability and determination to complete several major projects in Africa, including the world’s second largest sugar refinery and the largest cement manufacturing plant in Sub Saharan Africa.
Dangote is the man who reversed Nigeria’s long dependence on imported cement and made the nation a net exporter of the product. The ability to meet the demand of Nigeria’s large internal market on a key product such as cement that drives growth and expansion of other major economic sectors is a major victory for Nigeria’s economy. Even a greater victory than this can be expected when the refinery project comes on stream to do in the oil sector what has been accomplished with cement production.
Apart from foreign exchange savings, self sufficiency in cement production has gone a long way to ensure relative price stability, which has sustained growth in associated sectors and industries. Without the attainment of local dependence, the massive depreciation of the naira last year would have shot up the price of the product beyond reach.
Moving from the victory in cement to greater victory in refinery is a valid statement that Nigeria is capable of accomplishing the widest dreams in the world. The ‘miracle’ of self sufficiency in cement and the dream of a net exporter of fuel can as well be accomplished everywhere else in the economy. Nigeria is highly gifted as a nation in its people that have the greatest potentials and resilience imaginable to redeem a hopeless situation.
Here lies the confidence of the Vice President, Prof Yemi Osinbajo – the zeal of the Nigerian to whether the economic storm. His confidence for economic recovery rests on the availability of people that are extremely hardworking, optimistic and hopeful. Dangote has proved himself to be clearly one of such.
In recognition of his major accomplishments in industrial revolution across the African sub region, especially the landmark commencement of his refinery development project, Dangote made the list of Top 10 Magazine’s top 10 CEOs of the year, 2016.