Writing by Sediq Mutari

You can’t visit the place without being in awe.

For context, it is a 650,000-barrel refinery, the largest in the world, which started in 2016.

Located in Ibeju-Lekki, Lagos, the refinery covers approximately 2,635 hectares, seven times the size of Victoria Island, Lagos. This colossal project includes a 900,000-tonne polypropylene plant, 126 km of roads, 54,000 storm columns, and over 200 buildings. At the peak of construction, over 70,000 workers were on-site.

During civil works, 700 piles were drilled daily, totaling 250,000 piles. The refinery boasts 177 tanks with a 4.742 billion litre capacity. Over 2,262 units of high-duty equipment were purchased, along with 308 cranes to address Nigeria’s limited equipment capacity. The project included dredging 65 million cubic metres of sand, costing approximately 300 million Euros, to elevate the height by 1.5-1.75 metres, guarding against rising sea levels.

The refinery also features a 435 MW power plant, meeting the power needs of the Ibadan DisCo’s five states: Oyo, Ogun, Osun, Kwara, and Ekiti. It can produce 100% of Nigeria’s refined product requirements and surplus for export, including 53 million litres of gasoline, 34 million litres of diesel, 10 million litres of kerosene, and 2 million litres of aviation fuel per day.

In a CNN interview on Connecting Africa, Aliko Dangote, President and CEO of Dangote Industries Limited, and Africa’s richest man, reflected on the enormity of the undertaking. “People don’t really understand what we undertook to build the refinery. In fact, we didn’t know what we were getting into. If we knew, we would have run away. We wouldn’t have tried it. It was very, very, very tough. We are sitting on a land that is more than 4,000 standard football fields. The significance of this project is that we will be self-sufficient, not just in Nigeria but in West and Central Africa. I feel proud as an African that I’ve been able to prove that it can be done and we have done it.”

$19 Billion Investment

Speaking on the project’s cost, Dangote revealed, “We spent about $19 billion. It is going to change the game in terms of improvement. If we take in all the crude from Nigeria, it means that we will be taking about 21 million barrels per month. That would also help in terms of reducing the CO2 initiative, rather than ships coming all the way from Europe to bring in products. All the ships going out of Nigeria every month, then you have the products coming into Nigeria. In totality, when you calculate, you are talking about 480 ships of 1 million barrels. That actually will save the environment almost 1.5 to 2 million tonnes of CO2 emissions.”

Asked about the project’s profitability, Dangote said, “We will start making money soon. It is not just all about making money, but it also gives us great satisfaction that we are making Africa great. We are making Africa proud.”

AfCFTA and Overcoming Challenges

Addressing crude supply challenges, Dangote acknowledged, “There are challenges here and there. That is the truth. We have to be very open too. NNPC has been very, very helpful. They do their own bit. Some of the IOCs are struggling to give us crude oil. Because everybody is used to exporting, and nobody wants to stop exporting.”

Discussing Africa’s growth, Dangote emphasized the importance of processing raw materials locally. “It is because we export raw materials and import finished goods. It doesn’t matter what it is, whether it is gold or whatever. A raw material is always at a ridiculously priced amount compared to the finished goods.”

On the African Continental Free Trade Area (AfCFTA), Dangote believes it will be beneficial but noted the need for improved implementation. “The AfCFTA will be very, very beneficial. If you are talking about benefits, our company will almost be one of the top five in terms of benefitting from the free trade agreement. But I have not seen any improvement. We have 3 million tonnes of urea we export to African countries, and we have petroleum products to export. We have cement to export. We have too many things to export. What makes sense is to have the free trade agreement work. The trade between Africans is only about 16 per cent, which is too low. We have to make sure that all the regional markets have to remove these requirements of visas. We have to allow free movement of people, free movement of goods and services, and the AfCFTA will work. Without that, it is almost impossible.”

Intra-Africa Trade Issues

Dangote shared an experience highlighting visa issues within Africa. “I am going to Egypt tomorrow, but I need a visa. They are saying that they will give me a visa on arrival if I have an American visa. But I am an African, and Egypt is part and parcel of AfCFTA. But they are saying that no, if you have an American visa, we will give you. So, they are discounting me, being an African. So, how do we trade if you’re not allowing me into their country? What I would love to see is a South African come into Nigeria to get a job without hassle. If you don’t integrate, we will never see what we call prosperity. Integration is very important. If you remember, most countries used to have what we call the Ministry of Integration, but I don’t know what happened. Some of the countries have dropped this, and it doesn’t make sense.”

Future Prospects

Aliko Dangote is focused on the future, with a succession plan well laid out. He expects the group’s revenue to reach around $30 billion by the end of the year, placing the company among the top 120 companies globally.

PMS Delivery Date

During a recent visit by the Senate leadership, Dangote addressed the question of when Premium Motor Spirit (PMS), or petrol, would be available. “It is good for us to test all the types of crudes that we are receiving. You know sometimes you can buy crude and people can give you the one that has a lot of metal or a lot of sulphur. But the most important thing is that we know West Africa is a home for dumped bad fuel and bad petroleum products. This lab that we have here you cannot even find it in Saudi Aramco because we have the latest and we can test anything be it aviation fuel, diesel, gasoline, and kerosene and it will give you the actual result. The longest time a test will take here is 30 mins. As for PMS, it will start coming out by 10/15 of July. We want to keep it in the tank to make sure that it settles, and by the third week in July, we want to be able to take it into the market.”

Revelations from Afreximbank Meeting in Bahamas

At the Afreximbank Annual Meetings, Dangote revealed the challenges faced from the oil industry’s entrenched interests. “Well, I knew that there would be a fight. But I didn’t know that the mafia in oil, they are stronger than the mafia in drugs. I can tell you that. Yes, it’s a fact. But I’m a person who has been fighting all my life. You know, so I think it’s part of my life to fight. As a matter of fact, during the COVID period, some of the international banks really were looking forward to making sure that they pushed us into the default of our loans so that the project would just be dead. And that didn’t happen with the help of banks like Afreximbank.”

Dangote also disclosed that he has paid off $2.4 billion of the $5.5 billion borrowed for the Lagos-based refinery.