Page 4 - DMEA Week 42 2021

DMEA COMMENTARY DMEA

Central Bank reiterates

importance of Dangote

Nigeria’s Central Bank has once again pinned its hopes on the Dangote Refinery to ease
the country’s foreign exchange crisis without a single barrel having yet been processed.

AFRICA THE governor of the Central Bank of Nigeria discuss the issue “and we will ensure that wher-
(CBN) this week reiterated the important role ever we find the dollar we pay most of our debt
the Dangote Refinery can play in addressing before we service any obligation.”
WHAT: Abuja’s concerns about the depreciation of the Once the refinery comes into operation in
The Dangote Refinery naira. early 2022, he said it will be “a major FX saving
will become Africa’s Speaking during a meeting with foreign source for Nigeria. Right now, the overall forex
largest when it goes into investors in New York, Godwin Emefiele said we spend on imported items, the importation
operation next year. that the 650,000 barrel per day (bpd) facility of petroleum products consumes close to 30%,”
would save around 30% of its existing foreign including diesel, aviation fuel, gasoline and other
WHY: exchange (forex) expenditure which is cur- products.
With an integrated rently spent on importing petroleum products. Of Dangote’s 650,000 bpd capacity “there is a
petrochemicals facility Another nearly 10% could be saved when con- domestic component that is about 455,000 bpd.
located on site, Abuja sidering the neighbouring petrochemical plant Even if the 455,000 bpd is what is sold to Dangote
anticipates a significant which is expected to go into operation soon after in naira alone, it is going to be major forex saving
reduction in its fuel and the refinery. for Nigeria.”
products import bill. The governor made similar comments in He added: “If you look at the cost of freight
March, noting at the time that the Dangote alone, it is a major saving for Nigeria. That is
WHAT NEXT: Group had provided assurances that its pur- because if we have to go to Europe or other parts
Given its anticipated chase of Nigerian crude would not impact the of the world to bring in petroleum products
importance to the country’s 1.6mn bpd mandatory export volume where we pay heavily in freight and in stocking
Nigerian economy, the allocated by OPEC. those products in the high sea before we offload
relation between the them, Nigerians will benefit a lot from the Dan-
state and the private Nairanomics gote Refinery.”
facility will continue to During meeting with the International Mone- Meanwhile, Dangote’s petrochemical facil-
be watched with great tary Fund (IMF) and the World Bank, Emefiele ities are expected to save a further 5% of forex
interest. said: “We have ensured that any of our debts due from polyethene (PE) and polypropylene (PP)
is given utmost priority, particularly foreign granules and another 2% from fertilisers like
debts. It’s like first line charge.” urea.
The governor noted that he and Minister of According to Dangote’s executive direc-
State for Petroleum Resources Timipre Sylva tor of strategy, capital projects and portfolio

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