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How Dangote Refinery Might Be A Major Catalyst For Nigeria Economy Growth

The federal government under President Muhammadu Buhari and Dr. Emmanuel Ibe Kachikwu as Petrol minister invited interested investors that have interest in building Refineries, which Dangote Refinery and many other prospects signified intention and that was the beginning of a new Nigeria. The Government identified the Refinery as a major catalyst to growing our economy. Telecoms did the same thing 20 years ago, the economy, however, has outgrown the impact of the telecoms as it does not bring in forex rather it takes out a lot of Forex.

Photo Credit: Vanguard News

Instead of building our Refinery that could take at least 20 years to complete due to poor funding, Nigeria has chosen to adopt the private sector with reasonable state investment in all the Refineries. What Nigeria is currently doing is to make Forex available to importers at CBN rates so that the landing cost can be as manageable as possible, therefore, the CBN provides importers with 40% of our scarce Forex to bring in PMS.

This is a long term solution to a problem that has bedeviled our Nation since Abacha killed Saro Wiwa and we were sanctioned, this prevented NNPC from being able to maintain our Refineries, after the sanction was lifted, the government of Olusegun Obasanjo didn't consider the refinery a priority, instead, fuel was brought into the Country.

The impact of this policy killed the textile industry, and Shoe factories like Bata and Leanards, who depended on LPFO, waste products from the refining process. Low pour Fuel Oil (LPFO) being a waste product from the refining process, it was almost free from the refineries to the depot where textile sourced it to power their Boilers, until 1999, it was less than 80k/ltr, this cost only takes care of logistics like freight and storage. As soon as Refineries stopped producing this essential commodity by Textiles, we had to switch to sourcing the LPFO like we source PMS, AGO, or DPK.

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CBN Dangote Refinery Forex Nigeria Vanguard News


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