NIGERIA will be making huge foreign exchange savings and meeting demand for local petrol consumption following the commissioning of the much-awaited Dangote refinery by President Muhammadu Buhari on May 22.
The single largest refinery in Africa is expected to commence cargo lifting by the end of July or early August.
Industry sources say Nigeria would be saving $26 billion annually from petrochemical plants and fertiliser importation.
“Nigeria will stop importing diesel, petroleum products, fertiliser and petrochemicals. That is saving over $26 billion in foreign exchange.”
“The self-sufficiency in refined petroleum will also be achieved,” the Central Bank of Nigeria (CBN) governor, Godwin Emefiele, said at the commissioning of the $18.5 billion refinery.
He also confirmed the refinery would generate 5,000 permanent jobs and 12,000 megawatts of electricity.
Jobs and taxes
To a former president of the Nigeria Society of Petroleum Engineers, Joe Nwakwue, Nigeria would reap enormous benefits from the Dangote refinery with direct jobs and taxes being paid to both the federal and sub-national governments.
“When we export crude to Europe and import fuel, we export jobs and put pressure on our scarce foreign exchange. The refinery will save us from that and create thousands of direct and indirect jobs,” Nwakwue said.
The refinery, he added, would also make fuel available at affordable price and save us from long queues of fuel scarcity.
He said, “The over $12 billion spent annually on importation would be saved and have a salutory effect on our exchange rate.”
Nigeria spends an average of N4.3 trillion annually on subsidy.
“There would be flexibility in Nigeria’s foreign exchange market once the cargo lifting commences. Gas is also a low-hanging fruit for the in-coming government if they can really pay closer attention to it,” a development economist, Kelvin Emmanuel, told The ICIR.
The Dangote refinery has strategically positioned Nigeria’s oil and gas market for the global business opportunities.
Most oil majors at the commissioning were said to be match-making their businesses and looking towards bringing in their cargoes here.
For some economic watchers, this is a major signature to Nigeria’s industrialisation.
The huge pull of capital into the economy from this project would have significant multiplier effects, Emmanuel noted.
The Dangote refinery has the capacity to produce 650,000 barrels of crude a day, and meet Nigeria’s local consumption needs.
It is powered by a 435-megawatt power plant.
At full capacity, it can meet 100 per cent of the home requirements of all refined products, as well as meet export targets. The refinery was designed to process 100 per cent Nigerian crude, with the flexibility to process other varieties of crude, including many African countries’ crude, some middle eastern crudes, and the United States’ light-tight oil.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.