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Multi-billion Dollars savings: Implementing government’s support in fast-tracking Dangote Refinery

By Samuel Ibiyemi

Introduction

The acceptance by the Chairman of Dangote Refinery and Petrochemicals Alhaji Aliko Dangote to fast-track the completion of the facility before 2019 has rekindled the hope of saving extra billion dollars for Nigeria. This is following the promise by the Federal Government to provide support for the mega project. Hence, the need for both the executive and legislative arm of the Federal Government to collaborate in addressing impediments that could affect early delivery of the project considered as the only hope of saving over $7.5 billion annually as expenditure on fuel importation and its logistics.

According to Dangote”These projects will be creating about 4,000 direct and 145,000 indirect jobs. We will also save over $7.5billion for Nigeria annually, through import substitution and generate an additional $5.5billion per annum through exports of the refined petroleum products, fertilizer and petro chemicals. We envisage that these projects, which would cost over $18billion, would be completed in 2019.”

However, the Minister of State for Petroleum Dr Ibe Kachikwu  pleaded with Alhaji Dangote during his first visit to the refinery complex project at Lekki Free Trade Zone last week to fast- track the project in order to realize the target of ending fuel importation by 2019

Dangote said he has accepted the challenge and would do all possible to achieve the feat.

In this regard the President of Dangote Group, stated: “on the Honourable Minister’s challenge, we are going to make it by the grace of God. I am sure the minister will support us to make sure that we meet his challenge.

“What the minister is trying to do is the best so far for our country, his own version is that Nigeria should not think of exporting crude, you know the problem we have in Africa is that we only export raw materials, not finished goods, so he is saying that, look, we should all do this by adding value and I pray that even at 2.5million barrels, we should not export much, in terms of the crude.

 Kachikwu also promised that the Federal Government is ready to play its part as a responsible government to assist in making sure the project is completed before the scheduled date.

The minister who said he was overwhelmed by the dimension of the project explained that the present government had always believed that the private sector holds the ace in industrialization efforts of the government. He noted that that belief has been reinforced by what the Dangote Group is doing.

He said: It is good to say that private sector is the answer to Nigerian’s problems with a project as big as this. The challenge I will give you today is that of time, I see your time for completion is 2019 December but I am sure you will understand my greed if I tell you that the refinery component of this project should come earlier than the set date.

Issues & Bureaucracy

It is no longer news that bureaucracy in processing of documents needed for delivery of equipments in-country remains a major impediment to execution of projects in the energy sector. It will be recalled that bureaucracy stalled  the construction of 10 power plants belonging to the Niger Delta Power Holding Company (NDHPC) under the scheme of the  National Independent Power Project (NIPP). Hence, turbines for these plants spent over two years at the port. Of recent, the Dangote explained that the fall in the value of Naira against Dollar had raised the cost of the project.

Equally, the support of the federal and Lagos State  governments in ensuring cordial relationship with the host communities is an essential ingredient required. Hence, the government particularly Lagos State government should make adequate investment towards educating youths and elders of the host communities on several benefits associated with the mega refinery.

This will help their representatives to be insulated from sponsors of crisis that may infiltrate these communities such that issues that could be resolved amicably will not  become the weapon of protest and disruption.

At a time kidnapping has become a juicy business in Nigeria, adequate security should attract the intervention of the government so that Dangote Group can focus mainly funding and technical activities needed  on how to complete the refinery before 2019.

Negotiation strategies adopted   by the government to secure the Niger Delta from militants  and increased crude oil production from 900,000 barrels day to 2 million mpd should be utilized as the foundation of these projects.

Hence, Lagos state should focus more attention at developing the manpower capacity of youths in Lekki so that they will be suitable for job placement at Dangote refinery.

Sabotage by beneficiaries of fuel importation

Electricity supply in Nigeria’s power sector remains epileptic till date due to the alleged collaboration of generator importers with criminals. Considering the size of annual expenditure on fuel importation, the government should ensure the protection of the refinery’s construction from sabotage internally and externally. Conspiracy by foreign refiners serving as suppliers to Nigeria’s fuel importers should not be ignored but should be tracked and prevented from delaying the completion.

Crude supply

Although the refinery is designed to refine petroleum products for export, adequate support should be made by Kachikwu so that International Oil Companies (IOCs) as partners of the Nigerian National Petroleum Corporation (NNPC) should put sales of crude to the refinery as priority from their production activities. It is therefore necessary that fresh agreement with date for delivery should become a daily review so that the refinery will not be affected by crude oil supply shortage particularly as the global economy recovers and prices of crude in the international market continue to rise.

Hence, government officials and agencies requiring approval of various activities should therefore deploy enough manpower and equipment at the site of the refinery.

According to Kachikwu, “I have made very firm commitment to Nigerians that I must stop the importation of petroleum products by 2019 and I am going to keep to it. It is absolutely important that we do this early and given the feat that we have achieved in terms of speed of construction I urge you to do all within you to achieve its completion before the due date.

“I am sure His Excellency President Buhari will be absolutely enthused if he were to find himself, not only crystalizing the policy position we have taken so far but also coming here himself to come and open a facility as big as this before the end of his first term. Whatever configurations your engineers have come up with, I urge that they go back to the drawing board and get me my refined products before your said date,” he said.

Conclusion

Fulfilment of the promise to collaborate in fast-tracking the completion of Dangote refinery should therefore be transmitted as paper document and not just a verbal promise. This will definitely become an official document that will reduce cost of reviewing agreement signed  with equipment supplier and contractors.

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