Nigeria is moving towards a different future. Just three weeks ago, an inauguration meant the first steps of a revolution that, if the forecasts are met, will mark the immediate future of the gigantic nation of 220 million inhabitants and will transform the national oil sector.
Accompanied by several African presidents, on May 23, outgoing President Muhammadu Buhari inaugurated in the city of Lagos the largest oil refinery on the continent, built by the Dangote group, owned by the richest man in Africa, Nigerian Aliko Dangote.
The project of pharaonic dimensions – it has cost 17,600 million euros and has an area of ??2,635 hectares, equivalent to a quarter of the city of Barcelona or almost all of Girona – is not just another infrastructure: experts compare its strategic and economic importance with the Suez Canal in Egypt.
On the day the refinery was launched, Buhari called the project a “turning point for the petroleum products market not only in Nigeria but in the entire African continent.” Beyond its borders, the enthusiasm is similar.
The magnitude of the numbers is impressive. The new facility will have, as of the end of July, the capacity to produce 650,000 barrels of crude oil per day, an amount that would satisfy 100% of the country’s demand for gasoline, diesel, and kerosene. By the end of the year, the refinery will also produce three million tons of fertilizers, in addition to aviation fuel and plastics.
The result will be to put an end to historical nonsense. Although Nigeria is one of the world’s leading exporters of crude oil, it is highly dependent on importing petroleum products such as gasoline due to its limited refining capacity. One piece of information illustrates the decline: the country has four public refineries that together could generate up to 450,000 barrels per day, but due to mismanagement and lack of maintenance, they operate at between 15 and 25% of their capacity.
The savings for the Nigerian coffers will be huge, since the Nigerian government spends 12,000 million a year to import products derived from crude oil, in addition to paying 6,000 million euros a year in subsidies to keep the price of fuel low.
For respected Guinea-Bissau economist Carlos Lopes, former executive secretary of the United Nations Economic Commission for Africa, the Dangote refinery is a before and after: “I have no doubt that it will be something revolutionary. For a country so highly dependent on oil revenues, this development goes to the heart of its entire economy.”
Lopes compares the importance of the Nigerian infrastructure with the Suez Canal, operated by the French and British until its nationalization by Egypt in 1956, and even ups the ante.
“The amounts invested and the transboundary impacts are enormous and broader compared to what the Suez Canal represented when it was built. This is an investment never seen before in Africa. The refinery will create a small city of around 30,000 people, with a power plant that generates more energy than two neighboring countries (Benin and Togo) and with cutting-edge technology in logistics, processing and refining of products.”
This last question points towards the real industrial revolution that awaits just around the corner. “In addition to generating refined petroleum products,” adds Lopes, “the refinery will also produce petrochemical products, such as fertilizers and plastics, which will help accelerate industrialization in Nigeria and create numerous employment opportunities.”
According to the most prudent estimates, the refinery, located between the Lekki lagoon and the Atlantic, one hour from Lagos, will generate 100,000 direct and indirect jobs, although the most optimistic raise the final figure to 250,000.
For the spokesman of the Nigerian NGO Defense for Social and Economic Justice, Jerome-Mario Utomi, the fact that the refinery has private capital sends a political message: “the time has come for Africans to reject the false and ridiculous reasons of their leaders as explanation of why the continent is not yet industrialized or developed”.
In an article in the Nigerian newspaper The Guardian, Utomi stressed that Dangote, despite not having any political position and unlike the government, has been able to read that, with current unemployment levels (official unemployment in Nigeria is 40.6% ), “the only way to survive is to industrialize”.
The director and expert in Nigeria of the British consultancy Promedia Consulting, Antony Goldman, speaks of a “turning point” for Nigeria “not only for oil, but for a matter of identity and to stop a cycle of corruption in the main sector national interest. The fact that Nigeria imported refined petroleum products until today was a symptom of Nigerian corruption for generations. The Dangote refinery has the potential to break with that model, it is an opportunity for Nigeria to run its economy in a more transparent and efficient way”.
For Goldman there are two risks. First, those who have benefited from a corrupt sector will not look kindly on transparency. “And they are extremely powerful and wealthy men,” she warns.
Second, Dangote will store even more power in his hands. “After avoiding getting into the oil sector for 30 years –he explains–, if Dangote does it now it is because he is convinced of his success. This is a career-defining investment for him. But if this project works, it will change his aura and give him a lot of power. Political ambition? Dangote believes that he can change things more from business than from politics, but he can never say never…”
