Dangote refinery and Nigerian economy

When the Dangote Refinery comes on stream by the first quarter of 2019, it will be another major contribution of the Dangote Group to the growth and development of the Nigerian economy.

For an economy that is hard pressed already by a combination of factors including a volatile exchange rate regime, dwindling oil revenue, investor-apathy, among others, the coming of this refinery to deliver 650,000 barrels per day (bpd), attract foreign direct investment (FDI) and generate $500 million revenue for the federal government in three years, is a delicacy to hunger for.

There is no wonder, therefore, that this investment enjoys support from both the federal and Lagos State governments who are lending their weight to ensure that it succeeds. The great impact of this project on which construction is ongoing at its Lekki Free Trade Zone (LFTZ) location in Lagos is not lost on the government as revealed at the weekend by Yemi Osinbajo, the vice president.

“With the Dangote Refinery and other projects coming on stream, Nigeria still has the potential to play big in the global oil industry”, the Vice President  who was on tour of the facility in the company of  other government officials hoped, adding that government was harnessing the potential of the private sector to grow the nation’s economy.

We are gladdened by this realisation in government circles that sustainable growth and development of any economy are only possible when government recognises private enterprise as engine of growth. Our hope is that the Federal Government should go beyond this realisation to providing the enabling environment that would support such enterprises.

Hostile business environment in Nigeria has discouraged and, in some cases, frustrated many private sector operators who, unable to cope with unfriendly regulatory policies, expensive, long and tortuous registration and approval processes in the case of real estate, poor road network, epileptic power supply, etc have been the bane of investment in the country with the attendant losses in terms of revenue to government, job creation, city development, among others.

Dangote refinery is just one investment and, by all projections, the largest in the world. It comes with a petro-chemical and fertilizer plant which is also projected to be the largest in the world, making it an incredible industrial undertaking in the country and most ambitious in the continent today.

Another good news coming out of this investment which appeals to us is its job creation capacity. It is expected that the project will create direct jobs for 135,000 people and indirect jobs for 100,000 others, and there’s no gainsaying the multiplier effect of these jobs on the national economy.

Though the decision of the Dangote Group to embark on this project that will have great multiplier effects on growth and economy of the country is aimed at boosting economic prosperity, it is envisaged that the project will also put Lagos State on an expansive growth.

Aliko Dangote, the President/CEO of Dango Group, hopes that “by the time we finish these investments, especially the gas pipeline; a state like Lagos can run without any interruption of electricity power supply. It will be as good as living in London where you don’t see power outage. That is because we can supply power from here to anywhere; that means tripling the Gross Domestic Product of Lagos and it will create a lot of economic activities.”

Already, the Ibeju-Lekki and Epe axis of the state which are the project’s catchment areas, have started seeing considerable level of investment in property for both investment and residential purposes. Many estates are springing up almost on daily basis as many people are taking position for the expected boom in the property market of that axis.

Apart from real estate, expectation is that this huge investment would attract other investors to the LFTZ such as ancillary industries that will service the refinery and also businesses such as shopping malls, banks, schools, etc which will offer services to workers and sundry residents of the free trade zone.

We see the country become an industrial haven if only the Federal Government musters the political will to provide enabling environment, especially infrastructure, that will enable more investments of this magnitude to come into the economy. This, we hope, will change the country’s oil economy narrative for good. And, assuredly, poverty will give way for prosperity for the people and the economy in general.