$9b Dangote Refinery: CBN reiterates support for indigenous firms

Indigenous companies will get the support of the  Central Bank of Nigeria (CBN) to import equipment, the apex bank has said.

The bank reiterated its readiness to facilitate access to foreign exchange by manufacturers.

CBN Governor Godwin Emefiele made the pledge yesterday during an inspection of facilities at the $9 billion Dangote Refinery within the Lekki Free Trade Zone in Lagos.

The refinery, when it starts full operation, has capacity to refine 650, 000 barrels of crude oil per day (bpd).

The project is expected to produce 883 KPTA polypropylene plant, three million tons per annum urea plant and 1,100 kilometres sub-sea pipeline infrastructure.

According to Emefiele, the refinery will reverse the local economy from net-importer of refined petroleum products to net-exporter products.

The governor said that the support to indigenous companies by the CBN was to ease the importation of equipment needed to aid local production.

He said: “I am extremely delighted on the huge investment and massive progress recorded here in Dangote Petrochemical and Fertilizer Refinery.

“This shows commitment and readiness for business. I have said it before that we will also support Nigerian companies that take interest in construction and manufacturing of goods in Nigeria.

“CBN will provide funding in terms of foreign exchange and naira to import equipment that will fast-track business activities.

“Dangote Group‘s $9 billion investment is a reality of an indigenous company’s commitment that is interested in the socio-economic growth of Nigeria.

“This has made us to support Dangote Group with N75 billion in Forex to import equipment and other facilities to ease completion of the refinery.

“This is the kind of investment we need that will empower Nigerians and boost our revenue. I am happy that this project by Dangote Group came up in my life time. The Federal Government will continue to support the project and any other projects in the country.

“The ongoing nine-billion-dollar-refinery investment will enjoy our support, no doubt. We are doing this to fast-track other importation of equipment you will need for a speedy completion of that project and to encourage other Nigerians to follow your lead,” Emefiele said.

According to him, the tour was to show CBN’s support to “this laudable project that will transform Nigeria’s downstream oil sector”.

Emefiele said that the apex bank will continue to support tremendous and impactful projects that would improve the socio-economic profile of the country through such investments.

He said the diversification of the Dangote Group was worthy of emulation by other industrialists.

“By the time this refinery is completed, it will not only service the needs of our domestic economy but shore up our international oil investments. Projects like this and our support will encourage more Nigerians to begin to think like the Dangote Group.” he added

Emefiele commended the project’s promoter, Alhaji Aliko Dangote, for his resilience and dedication to create wealth.

He said: “It may interest you to know that we always expend one third of our total foreign exchange obligation to import petroleum products.

“When the fertilizer plant will commence operation between April and May this year and the Refinery commences operation in April 2020, we will have a lot of savings from foreign exchange. In near future, we may be buying foreign exchange from the Dangote Group.”

Urging other private licensees to develop capacity to build more refineries, Emefiele said: “I have not seen any licensee approach the bank for credit to build refinery.

“Remember, such licensee will approach his bank which will in turn assess his capacity to build such refinery and such request will be forwarded to the CBN for approval.

“If they have the capacity, we will support them through their banks,” Emefiele said.

Responding, Dangote commended the CBN for its support and for believing in the project, assuring that as the largest single train refinery in the world, Dangote Refinery, will commence operations in April next year.

Dangote said that the construction of the refinery that will be producing 650,000 barrels of crude oil per day by the Dangote Group was expected to help Nigeria save over $7.5 billion through import substitution.

He said that it would also put the country on the global map as a major oil and gas hub in Africa.

The industrialist said that the Dangote Refinery, therefore, will help the government create a robust domestic refining sector.

According to him, the plant will reduce the importation of petroleum products and save the country from capital flight.

He said: “The refinery is going to save a huge amount of foreign exchange out- flow because, today, forex is being used in the importation of petroleum products and our foreign reserves are being heavily depleted.

“And whatever little forex we are earning from the sale of crude oil, is being used to import petroleum products. Our petroleum refinery is going to have a major beneficial impact on the economy in terms of foreign exchange savings.

“We will be adding value to our economy as all these projects are currently creating about 26,000 employment opportunities.”

He said that when completed, it would create about 80,000 employment opportunities.

Dangote said: “We will also save over $7.5 billion for Nigeria annually through import substitution. We will generate an additional $5.5 billion per annum through exports of the refined petroleum products, fertiliser and petro-chemicals.”

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