Page 4 - AfrOil Week 09 2021

AfrOil COMMENTARY AfrOil

(Image: DMA Europa Group)
(Image: DMA Europa Group)
Nigeria eyes benefits of

Dangote refinery project

Following decades of underinvestment in the country’s oil-processing sector, Nigerian authorities can

barely hide their excitement about the prospect of Africa’s largest refinery launching early next year

THE construction of Aliko Dangote’s Nigerian bpd capacity is offline pending overhaul.
refining project continues to be hailed as the sav- While there remains uncertainty about the
WHAT: iour of the country’s downstream sector, but its volume of Dangote’s output that will be sold
The launch of the Dangote potential for far wider positive impact is becom- domestically, its completion is expected to bring
refinery will transform ing clear. economic and regulatory reform as well as pro-
Nigeria’s downstream At 650,000 barrels per day (bpd), the $15bn viding a boost to the local job market.
sector overnight. Dangote Group plant, which is now under con- Speaking this week, the governor of the Cen-
struction in the Lekki free trade zone (FTZ) tral Bank of Nigeria (CBN), Godwin Emefiele,
WHY: near Lagos, will be Africa’s largest, offering sig- said that Dangote has provided assurances that
NNPC has failed to main- nificant economies of scale. While its opening its purchase of Nigerian crude would not have
tain its existing refineries, was recently pushed back from Q4 2021 to early an impact on the country’s 1.6mn bpd manda-
and there are hopes that 2022, when it does come on stream, it has the tory export volume allocated by OPEC.
this new privately-owned
plant can help drag the potential to transform Nigeria’s downstream
sector back on to its feet. instantly from basket case to the continent’s ris- Naira boost
ing star. Emefiele said that the refinery would conduct its
WHAT NEXT: Its prospective impact is made all the clearer trade in naira, alleviating a significant burden on
The Dangote refinery may when taking into consideration that state- the state’s foreign exchange reserves.
prop up Nigeria’s foreign owned Nigerian National Petroleum Corp. He estimated that around 41% of Abuja’s
exchange reserves and (NNPC) has not carried out turnaround main- foreign exchange spend could be avoided if
ease reliance on fuel tenance (TAM) work at its three refining com- petroleum products were sourced locally and
marketers. plexes for around 44 years, and its full 445,000 purchased in naira.

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