Nigeria: an ambitious refinery plan will “reduce oil imports”

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Africa’s richest man announced plans on September 4th to build a refinery as well as petrochemical and fertiliser plants worth some $9 bn, promising to reduce Nigeria’s dependency on imported fuel.

Aliko Dangote, President and Chief Executive Officer, Dangote Group, Nigeria (Picture: World Economic Forum)

The plans were announced by Dangote Industries Limited, headed by Aliko Dangote, a Nigerian businessman labelled Africa’s richest man by Forbes.

According to a statement, the firm signed a loan deal with a consortium of local and international banks for $3.3 bn “for the purpose of constructing the biggest petroleum oil refinery and petrochemical/fertiliser plants in Nigeria.”

The refinery will be located at the Olokola Liquefied Natural Gas (OKLNG) Free Trade Zone in Nigeria’s southwest region and will have a projected daily production output of 400,000 barrels a day

“The plants, which will cost a total of $9 bn, will generate up to 9,500 direct and 25,000 indirect jobs, in addition to reducing current volumes of refined fuel imports by around 50% and effectively stopping the importation of fertiliser,” the statement said.

Construction of the plants in the country’s southwest is expected to be complete in three to four years, a spokesman said.

The deal could eventually prove pivotal for Nigeria, Africa’s most populous nation and largest oil producer, and other countries on the continent may also benefit.

“As a result, several African nations will be less reliant on importing fuel and fertiliser from foreign markets, reducing the negative impact of negotiating terms within increasingly turbulent international markets,” Dangote said in the statement.

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