AACS Fortnightly
(Mondays)
22nd May 2023

From the Chairman’s Desk,

*Dangote Refinery – A Testament to Private Sector Resilience

Today, President Buhari officially opens the $19bn Dangote Oil Refinery owned by Africa’s richest man and industrialist, Aliko Dangote. The facility has a capacity of 650,000 barrels a day, and it is not only the largest oil refinery in Africa, but also the largest single-train refinery in the world. The Nigerian Economic Summit Group (NESG) estimates that it will create an annual market of $21bn for Nigeria. According to Aliko Dangote in an interview with The Economists Magazine, “Refineries on this scale generate approximately $10 billion from exports”, even though the impact on FX could be nil cause the product would be priced in dollars. It is a raw testament to what the private sector can achieve, and must be encouraged in Nigeria.

Dangote’s refinery broke several industry records, including installing the largest crude distillation column, and the heaviest refinery regenerator. This is evidence of the vast innovative infrastructural potential of Africa’s largest economy. The expected production from the refinery reduces the logistics costs associated with importing refined oil. According to the CEO of Nigerian National Petroleum Company Limited (NNPC), the saved logistics cost could be up to N17 per litre, which could translate to savings of N1.02bn per day. This also reduces the expenditure of over $10bn annually on FX for imports, as the nation purchases locally from the refinery.

Further, the project improves production of a variety of fuels, polypropylene, and the availability of high quality grade Euro V gasoline. The integrated refinery is expected to generate over 100,000 direct and indirect jobs. The facility will also house a fertiliser plant that uses crude oil by-products as raw materials for the agricultural industry, producing over 2.8m tons of fertiliser annually, which in conjunction with existing production meets 100% local fertilizer needs, and puts the nation in the fertilizer exporting column, a commendable place from a few years ago when the product was imported into the country.

Africa’s biggest oil refinery project is a true wonder, with potential to give the economy a big shot in the arm , substantially eliminate subsidy fraud and alleviate pressures of possible subsidy removal. AACS applauds Aliko Dangote on a remarkable feat that concretize the roadmap for development in Nigeria.

Falil Ayo Abina

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