CNN
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Over the past eight years, Aliko Dangote, Africa’s richest man, has built one of the the largest oil refineries in the world. Spanning nearly 4,000 football fields, construction on the refinery began in 2016 in the Lekki Free Zone outside Lagos, Nigeria, and is slated to open in May 2023. Dangote’s company says the plant will have the capability they produce 650,000 barrels per day once fully operational.
Nigeria is one of Africa’s largest oil producers, yet the country lacks the capacity to refine its own oil, forcing it to rely on imported fuel. With the opening of this refinery, Dangote Industries Ltd., a huge conglomerate that also operates cement factoriesa fertilizer factory and sugar refinery, says it plans to process enough oil not only to make Nigeria self-sufficient but also to supply gasoline, diesel and jet fuel to other African countries.
Now that the $19 billion facility is complete, Dangote stressed that it will take time for local oil producers to move away from relying on overseas refineries, but it is a challenge he is confident he can overcome: “I fought battles all my life, so I’m not afraid of anything,” he told CNN.
In May, CNN’s Eleni Gioko got an inside look at the refinery and spoke with Dangote about what it took to get this massive project off the ground and what impact it will have on the continent.
The following interview has been edited for length and clarity.
CNN: Local oil companies, oil producers want to sell you crude?
Aliko Dangote: No one thought we would appear in this industry. So with that, we know there are challenges and that is the truth, I have to be very open with you, but the NNPC, [Nigerian National Petroleum Corporation], were very helpful. They do their part, but some of the IOC [international oil companies] they are struggling to give us crude because everyone is used to exporting and nobody wants to stop exporting, which makes no sense.
CNN
Aliko Dangote walks CNN’s Eleni Gyoko around his oil refinery in Lekki, Nigeria.
CNN: What is the timeline for Nigeria to be fully self-sufficient in oil production, local oil refining and export?
Dangote: Well, if the NNPC commissions all its refineries, Nigeria will be the largest petroleum exporting country on the continent. Not only in the continent – it will be one of the biggest (worldwide), not as big as India but almost. So let me talk about the Dangote refinery: 40% of our refined products will go outside Nigeria. This is after meeting all of Nigeria’s demand. We will meet demand 100%. By June or so, we should be able to fully meet Nigeria’s demand and then, because we’re already ramping up, we’re already a little over 420,000 barrels per day. So as we go forward, ramping up, I think by July/August we should be close to 550,000 barrels per day. Then maybe before the end of the year we’ll be around 650,000.
CNN: In addition to building the oil refinery, you have also built a cement plant and become one of the largest cement producers in sub-Saharan Africa. Did it make economic sense then to build a cement plant and effectively compete with imported cement prices?
Dangote: We didn’t have a big challenge because we were also the importers and there was a huge demand in terms of cement. So what we did was actually continue trading by building capacity. When we started, our first plant was 5 million metric tons and at that time, the entire production in Nigeria was 2.1 million metric tons. But we went very aggressively – we invested our money, risked our capital and made the country self-sufficient.
CNN
Aerial shot of Obajana cement plant located in Kogi State, Nigeria. It is one of the 10 cement plants operating under Dangote Cement.
CNN: I’ve heard you talk a lot about it African Continental Free Trade Area (AfCFTA) and whether it is sustainable. You have experience in cross-border trade and even have problems getting your cement across some parts of the continent, so what’s going on?
Dangote: AfCFTA will be very, very beneficial and if you think about the benefit, our company will be almost one of the top five in terms of benefits from the free trade agreement. But I haven’t seen any improvement [yet]. This is the truth because we have 3 million tons of urea [a type of fertilizer] for export to African countries. It is too much for Nigeria to consume. We have oil projects to export. We also have cement for export. So what makes sense is to make the free trade agreement work.
To pass this barrier – why trade between us [African countries] it is only about 16%, which is very low – we need to ensure that all regional markets are working. We must abolish visa requirements. We have to allow free movement of people, free movement of goods and services, then AfCFTA will work – without that it is almost impossible. I mean, you look at it today, tomorrow I’m going to Egypt, but I need a visa. They say yes, ok, ok, they will give me a visa on arrival if I have an American [passport]. I have an African passport so they discount me for being African. So how do we do business if you don’t allow me to enter your country?
23:00 – Source: CNN
A rare glimpse into Africa’s largest oil refinery
CNN: So how do imports affect industrialization and local development of value chains?
Dangote: Well, it will actually destroy the industrialization of Africa if we continue to import. The more you import, you import poverty into your continent and export jobs. Because no matter where you import from, you’re encouraging them to keep expanding. When they expand, they hire more people, they give more jobs to their people. But here, the little jobs we have to create, they’re ruining it. So, I’m not a big fan of imports.
I am a big fan of industrialization and Africa can be industrialized but we Africans are the only ones who can industrialize Africa. No one is going to come and do it for us. We have to have good policies and the policies have to be consistent, and then we have to make sure that the investment climate is good.