The Africa’s richest man said that with the planned commencement of the refinery located in Lagos, Nigeria could save up to $10 billion in foreign exchange (FX) and generate another $10 billion in exports when the facility begins operation.
The 650,000 barrels per day Dangote Refinery, the world’s largest single-train refinery, is set for inauguration on May 22, by President Muhammadu Buhari.
Dangote spoke in an interview with a special edition of London-based The Economist Magazine, titled ‘The World Ahead 2023,’ which was unveiled with considerable focus on West Africa and aimed to highlight both the potential as well as areas for improvement in Africa.
Expressing his views on expectations for the creation of value-added industries in Africa, the richest black man in the world stated that Nigeria’s economy as presently constituted has largely been built around the extraction and exportation of its natural wealth.
As a major oil producer, Dangote noted that Nigeria currently imports over 90 per cent of its refined petroleum products, which amounted to roughly $10 billion in imports in 2022.
While this has brought major benefits to many businesses, Dangote explained that more prosperity could be created by locally refining Nigeria’s resources, with the refinery being a major step in this direction by reducing the country’s dependence on imported refined petroleum products.
“The refinery’s completion will not only create direct and indirect jobs, but also lead to skills transfer and technology acquisition opportunities that will benefit the downstream sector,” said Dangote.
“Moreover, the refinery’s production of critical products like naphtha and polypropylene will stimulate the development of other industries, such as cosmetics, plastics, and textiles. Refineries on this scale could save Nigeria up to $10 billion in foreign exchange and generate approximately $10 billion from exports.”
“We see room for development of added value in agribusiness too. Here, initiatives like our Sugar Backward Integration Projects look to create a strong localised supply in the sugar industry. With a goal to produce around 0.5 million tons of sugar per annum from locally grown sugar cane, benefits will be created across the sugar value chain for local suppliers,” he added.
He noted that the soon-to-be commissioned 650,000 barrels per day refinery in Lagos, would enable Nigeria to achieve self-sufficiency in refined petroleum products, as well as export to other African markets.
According to him, there are also ample opportunities to increase the country’s rice production, with the ongoing construction of six rice mills that could mill approximately one million tons per annum of locally produced rice, thereby empowering local farmers.
The renowned businessman pointed out that the group of companies also has a 2.8 million tons per annum fertiliser plant tapping into the fertiliser market, while opportunities are being explored in tomato cultivation and processing as well as dairy production.
“With many parts of West Africa still facing food insecurity, the emergence of strong localised industries with resourceful suppliers and clear trade networks will be a big step in the right direction,” he maintained.
Dangote stressed that Nigeria presents an attractive investment opportunity for international investors, saying with the country’s abundance of natural resources, diversifying and digitising economy, youthful demographics and vibrant society, investors will find in Nigeria a country of many possibilities.
“Its population of over 200 million — of which 40 per cent is under the age of 15 – means the country’s demographic dividend offers investors with a long-term view an encouraging option in several sectors.
“Nigeria has a variety of untapped natural resources which, for commodity-driven investors, offers options in the upstream, midstream offers options in the upstream, midstream, and downstream segments. Its vast arable land and favourable climatic conditions similarly support a wide range of crops, positioning it as an auspicious destination for agriculture-based investments.
“Here, we expect to see the development of a strong, home-grown agribusiness industry. We are also seeing the emergence of a strong digital economy, with several Nigerian start-ups becoming vibrant players in their respective tech-fields.
“Nigeria’s import dependency and reliance on foreign markets presents major prospects for import substitution and supply chain localisation. Across various consumer-goods sectors of the economy, as well as supply-side needs for commercial and industrial enterprises, there are different options to set up localised supply networks,” he argued.