At last, the Dangote Petroleum Refinery has begun production with the receipt of about six million barrels of crude oil. What a pivotal moment for Nigeria! It’s the triumph of the resilience of one man, Alhaji Aliko Dangote, whose audacity to dream big, coupled with his unparalleled determination and unrelenting doggedness in bringing those dreams to fruition, has seen him climb every mountain and cross every ocean on his path to achieve the seemingly impossible.
It is only a man with a steely determination that will not break under the strain of massive cost overruns, an unforgiving, hostile business climate, policy inconsistencies, serial currency devaluations and currently the worst performing currency in Africa, forex scarcity, multiple taxation, high cost of capital, etc. that could pull this off. Nigeria will defeat you, if you are not made of steel.
That Dangote was able to complete his petroleum refinery is a testament to his superman capacity to ride the waves no matter how high they may be. Many of us continue to marvel at this prodigious project, no matter what a few naysayers have to say.
You see, this country would not have been in this precarious state if we had more of such projects driven by supermen like Aliko Dangote. Again, Nigeria would have been the pride of Africa, living up to its potential and promise as the beacon of hope and the powerhouse of the black race if such men were in political leadership.
Our incompetent and inept leaders have failed Africa. All they know how to do is loot the commonwealth and display it in our faces. They have become the biggest obstacle to the continent’s progress, the ones underdeveloping Africa from within its borders. So, for the richest man in Africa and a few others to pick up the gauntlet, doing what Nigeria as a country has failed to do for Africa, then the black race deserves to be applauded. And the world is taking notice.
At the last count, the Dangote refinery located in Ibeju-Lekki, Lagos, covering a land area of approximately 2,635 hectares, had gulped over $19.5billion. You would agree with me that, that is a prodigious figure. Not often do we hear of such figures ploughed into projects even in the Western world, let alone in Africa. At best, it is the type of project that multi-national consortia come together to undertake. But in this instance, an individual from one of the most challenged countries in the world, conceived and executed it, in spite of the very hostile business environment that is squeezing investors out of business. This, to me, is a feat worth celebrating.
It is the world’s largest single-train petroleum refinery, with a capacity to process 650,000 barrels per day with a 900 KTPA Polypropylene Plant. It is a thing of pride that a project of this magnitude is located in Nigeria. But even more enthralling is that it was conceived and built by an individual in a country where bad government policies by inept leaders remain the bane of doing business. Policies that are more often than not driven by malice. At full production capacity, the refinery can meet 100% of the Nigerian requirements of all refined products and also have surplus for export. How many of us truly understand what that means? Moving from being a net import-dependent country for all our petroleum needs to exporting locally refined products? Can you imagine the foreign exchange this will save for Nigeria?
This surely is a game changer for our bleeding national economy long crippled by forex shortages and organised oil theft with all the imprimatur of officialdom.
The country’s four refineries have been grounded for several years and may remain so, not because they cannot be fixed in a realistic sense but because those in charge of making them work are the ones sabotaging all efforts to fix them. The state-owned refineries have become a cesspool of corruption and organised crime. Where hundreds of millions of dollars regularly voted for Turnaround Maintenance, TAM, have only served to enrich a few fat cats in the Nigerian National Petroleum Company Limited and their collaborators in government. That is the sad situation Nigeria finds itself in.
And for those who may not know, crude oil export is the source of well over 80% of Nigeria’s foreign exchange earnings. Now, if we can’t protect our production volume from organised syndicates who have perfected the art of stealing the crude from the pipelines before it gets to the terminals for export, how would we earn enough forex for the Central Bank of Nigeria (CBN) to make available to importers of other goods and services? The bigger questions are: how do these syndicates get the stolen products to the international market ahead of Nigeria? Who exactly are the members of these syndicates? Why has no one been named publicly? Who is covering up for them in government? Surely, someone or some people who are high up in the government know/s something.
Two years ago, the country spent 40% of the foreign exchange it earned from the little it was able to generate from export earnings on the importation of petroleum products as well as petrochemicals which put a lot of pressure on the exchange rate, according to the former Central Bank of Nigeria (CBN) Governor, Godwin Emefiele who did everything he could to help the Dangote refinery come to fruition. Yes, you heard me clearly, he had said 40% of all forex earnings went into the importation of petroleum products. This has created a vicious circle of perennial shortages of forex for other import-dependent sectors.
In the land of my fathers, there is a saying: “A nation that cannot feed itself is not free.”
So, one can begin to understand the relief the Dangote refinery is set to bring to Nigeria. Officially going into production of refined petroleum products is an incredibly important milestone that should be celebrated. It is the last chapter of a checkered journey that began with the acquisition of the Port Harcourt and Kaduna refineries in 2007. I think a brief history will suffice here if for nothing but to refresh peoples’ memories.
In May 2007, the then outgoing Olusegun Obasanjo administration took the bold decision to sell the government’s majority stake in the Port Harcourt and Kaduna refineries to Bluestar Consortium promoted by Aliko Dangote, Femi Otedola and Transnational Corporation of Nigeria, Transcorp for a whopping $750 million with the Port Harcourt refinery selling for $561 million. It was Nigeria’s largest refinery, a 210,000-barrels-per-day (bpd) facility, while the Kaduna refinery had an installed capacity of 110,000bpd.
That transaction triggered an avalanche of wild criticisms from many ignorant Nigerians and labour unions who sprang into action, doing their utmost, to frustrate the sale. And they did. But today where are we on the matter? Is the country better off than it was then before the sale and subsequent revocation? Where are those who opposed the sale then purely on emotional grounds than the economics of the transaction? They have all been put to shame. And the country is the loser for it. I don’t need to remind anyone of the fights at filling stations, the endless hours wasted in queues, sometimes overnight at petrol stations just to get fuel for our cars.
The two main oil unions in the sector – the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) were up in arms, claiming that the two refineries were wrongly sold by the Bureau of Public Enterprises, alleging that “the sale of the two firms was completely lacking in transparency”. They also stated that no due diligence was carried out and that the Port Harcourt refinery was worth close to US$5 billion, about nine times the amount it was actually sold for. For those who still remember, the sale of the refineries to Bluestar was one of the reasons for the general strike that paralysed the Nigerian economy for four days in June, 2007 during the government of the late Umaru Musa Yar’Adua.
The then NNPC and the Department of Petroleum Resources (DPR) joined the clamour for the transaction to be revoked, claiming that they were capable of running the refineries in contrast to Bluestar, which had no actual experience of operating refineries. Really? The surprising thing was that so many Nigerians were sold on the NNPC narrative. Following Bluestar’s eventual pull out of the transaction, the then Group Executive Director of the Refineries & Petrochemicals Department at NNPC, Abubakar Lawal Yar’Adua, was reported by THISDAY to have stated that if given the necessary support, the NNPC had the capability to run the refineries efficiently. He forgot to mention that it was years of inefficiency and corruption by NNPC’s management that forced the Obasanjo government to sell the government’s majority equity stake in the refineries in the first place.
Not done, he argued that the solution to the nation’s petroleum shortages would not be found in the sale of the refineries, but in conducting proper turnaround maintenance on them as well as building new ones. The then DPR director, Tony Chukwueke, on his part, said that the nation had not exploited all the models that could ensure that the refineries worked optimally and that Nigeria could invite foreign technical partners to run the refineries, or conduct repairs whenever the need arose. Where is he now? He did not tell us the model that was better than outright sale of the refineries. He just went into a long rigmarole to deceive the nation.
Well, where are we today? Nearly 14 years after Bluestar Consortium pulled out of the transaction and the refineries reverted to NNPC’s (now NNPCL) control, they have become as good as dead wood. They have not produced anything of value to this country, not a pint of petrol, despite the huge sums pumped into their maintenance and associated costs. Who are the gainers and losers in this unholy alliance of individuals against Nigeria? The same entrenched interests at NNPC or NNPCL as it is now known. And of course, the labour unions who prefer their workers earn wages for doing nothing.
Just last December, the Senate signalled its intention to open an investigation into what senators perceived as a sabotage of the federal government’s effort to revive the nation’s refineries, in spite of N11.35 trillion, excluding costs in other currencies, which include $592,976,050.00 dollars, 4,877,068.47 euros, and 3,455,656.93 pounds sterling spent on the renovation of the refineries from 2010 till date, yet they remain unproductive.
Don’t forget that just recently, the federal government awarded another contract worth a mind-blowing $1.5billion for the rehabilitation of the Port Harcourt refinery to an Italian Company, Tocnimont SPA, spanning three phases of over 18, 24 and 44 months. Let me ask the frequently asked question on the streets: who did this to our country? Only in Nigeria will you find bizarre rationale for doing stupid things like this. I can bet an arm and a leg that more than half of that $1.5billion will end up in private pockets. Our penchant for inflated cost of contracts will make allegations of corruption in other climes look like petty pick-pockets.
I challenge anyone to do the maths. In 2007, the Port Harcourt and Kaduna refineries were sold for $750 million. In March 2021, nearly 14 years after the sale fell through due to the organised public outcry, the federal government after wasting billions of dollars on several maintenance programmes, awarded a contract for the rehabilitation of the Port Harcourt refinery alone for $1.5 billion.
Fellow Nigerians, may I ask again: who are the losers in all of these? And who are the gainers? Nigeria is a country that gives and keeps on giving. Everyone is milking her but no one wants to feed her. Knowing how these people have consistently scammed this country, I am not enthusiastic that the $1.5 billion for the rehabilitation of the Port Harcourt refinery will bring about the expected results. It is a complete waste of taxpayers’ money, part of which will be repaid to Afrexim which partly financed the rehabilitation.
Now, with the rehabilitation purportedly nearing completion, NNPCL announced it had begun the search for third-party managers to run the refinery. Instead of spending $1.5 billion on rehabilitating the refinery and now looking for third-party managers to run the place, why didn’t the government just sell the scrap and the buyer or buyers can turn it around with their money, thereby saving that $1.5 billion taxpayers’ money expended on the rehabilitation and deploying it in other urgent infrastructure needs? No, because those who profit from Nigeria’s failure to function optimally only ask: “What is in it for us.”
It is not a surprise therefore that Dangote decided to build his refinery from scratch. However, the Eureka moment for Nigeria following the commencement of production by the company is tempered by NNPCL’s inability to meet its crude feedstock required to enable uninterrupted production. Interestingly, the visionary Dangote saw it coming and prepared for any eventuality. The factsheet about the refinery is very impressive. It was designed for 100% Nigerian crude, with a flexibility to be able to also process a large variety of crudes, including many of the African crude grades, some of the Middle Eastern crude grades and U.S. Light Tight Oil.
So I was not surprised when news filtered in that Dangote had purchased two million barrels of West Texas Intermediate (WTI) Midland from the United States-based oil trader, Trafigura Group, for delivery at the end of February. You see, the irony and contradictions of our situation are not for the lily-livered. And again, I asked, who did this to us?
Here is a nation blessed with enormous crude oil resources, once a major producer of crude oil, but imports all its refined petroleum needs because it pays some corrupt officials for the country to export jobs overseas rather than add value by exporting refined petroleum products. And here is a country where an individual just built the largest single-train refinery in the world of 650,000 barrels per day capacity, now having to import feedstock from the United States of America or elsewhere because of NNPCL’s inability to supply it with enough crude for refining.
As I have been made to understand, only a minute fraction (if any) of Nigeria’s current crude oil output is unencumbered by one loan facility or the other. The repayment of the recent $3.3 billion loan taken by NNPCL from Afrexim on behalf of the federal government to stabilise the failing naira is guaranteed with 90,000bpd for five years.Then there’s the forward sale agreement entered into by NNPCL with the Lekki Refinery Funding Limited (Project Bison) in September 2021 to supply 300,000bpd of crude oil for the settlement of the balance US$1.036 billion funding received for the financing of the US$2.76 billion investment in the Dangote refinery.
All these, mind you, preclude the fantastically corrupt domestic crude allocation regime operated by NNPCL under its Direct Sale-Direct Purchase (DSDP) arrangement with international oil traders, not to mention the modified carry agreements that the state-run oil firm has with the IOCs, which have all eclipsed Nigeria’s oil exports and shrunk the country’s oil forex flows.
Indeed, a recent review by Dr Jekwe Ozoemene, a Fellow of the Chartered Institute of Bankers of Nigeria, of NNPCL’s 2022 audited accounts showed that the Group has total contract liabilities on forward sale agreements – Projects Falcon, Santolina, Panther and Bison, and NLNG SPDC, NLNG TEPNG and DSDP customers – of N2.615 trillion. Forward sales – implying crude oil commitments for which NNPCL has received value but is yet to deliver crude oil. Is it any wonder that NNPCL, a minority shareholder in the Dangote refinery, cannot supply the crude feedstock needed by the plant?
Meanwhile, can anyone point to what the last administration did with the massive borrowing it embarked on? This administration has now begun its borrowing to save the naira.
Just recently, the operatives of the Economic and Financial Crimes Commission (EFCC), raided the Lagos Head office of the Dangote Group of Companies in search of documents relating to their purchase of dollars in the last 10 years. Please can anyone tell me what this was about? What did they need such documents for? Why didn’t EFCC just ask the CBN for the documents since they were so critical to its investigation? I find it curious and laughable that any serious crime-fighting body would ask the person they are investigating to come with the evidence of their guilt. Where in the world do you ask someone you are investigating to give you evidence to nail him? Does it make any sense?
Before that raid, there had been whispers that this government was not well disposed to Dangote for whatever reason. Then it found a nebulous pretext to launch its harassment of his companies.
Strangely, after storming the companies’ headquarters and disrupting workflow for hours, the operatives left without taking any document.
But this same government did not see the need to launch an investigation into all those who got forex at concessionary rates to perform Muslim hajj or Christian pilgrimage to Jerusalem.
As I have already stated, it was all about intimidation and harassment, to settle old scores. Nothing more, nothing less.
President Bola Ahmed Tinubu’s EFCC must be condemned for the gangster-like manner it raided the Dangote head office. For sure, Dangote or his companies are not above the law, so if there is any need to launch an inquiry into any suspicious activity, please, do so. But it must be done in accordance with due process and civilised standards.
The manner by which EFCC’s operatives stormed the Dangote head office sends the wrong signals and lends credence to the word on the streets that the president has an axe to grind with Dangote. As far as 1 am concerned, it did grave damage to the elusive quest for foreign investors. Those investors this government is looking for all over the world would pause and think twice before venturing here. If the country’s biggest investor, the largest employer of labour in the private sector, owning one of the largest listed companies on the Nigerian Exchange group and one of the highest taxpayers in the country and major contributor to its GDP, can be so harassed by people in government positions who have never earned anything by enterprise, then it makes sense for other investors to keep away.
In other climes, where leaders have sense, they would do everything to protect and support Dangote’s massive investments in the economy, rather than hound him. Maybe, I should state here without mincing words: It has got to the point where the Dangote Group of Companies can be classified as a national security asset with business presence in cement, fertilizer, sugar, salt, petroleum refinery, rice production, construction, port operations, automotive, real estate, mining, transportation, logistics, agriculture, etc. Indeed, what TATA is to India is what Dangote has become to Nigeria. It is Nigeria’s own answer to India’s TATA. It projects Nigeria and Africa to the world positively regardless of our bad leaders.
The late Lebanese-American poet and philosopher, Kahlil Gibran captured the Nigerian tragedy so succinctly in his poem,
The Garden of The Prophet:
“Pity the nation that is full of beliefs and empty of religion.
Pity the nation that wears a cloth it does not weave
and eats a bread it does not harvest.
Pity the nation that acclaims the bully as hero, and that deems the glittering conqueror bountiful.
Pity a nation that despises a passion in its dream, yet submits in its awakening.
Pity the nation that raises not its voice save when it walks in a funeral, boasts not except among its ruins, and will rebel not save when its neck is laid between the sword and the block.
Pity the nation whose statesman is a fox, whose philosopher is a juggler, and whose art is the art of patching and mimicking
Pity the nation that welcomes its new ruler with trumpeting,
and farewells him with hooting, only to welcome another with trumpeting again.
Pity the nation whose sages are dumb with years and whose strongmen are yet in the cradle.
Pity the nation divided into fragments each fragment deeming itself a nation.”
Indeed, this country deserves to be pitied.
