President of Dangote Group, Aliko Dangote has revealed how entrenched interests in the oil sector fought to prevent the actualisation of the $20 billion Dangote Petroleum Refinery project.
Africa’s richest man made the revelation during an interview with Chief Executive Officer of Norway’s Sovereign Wealth Fund, Nicolai Tangen.
He said the entrenched interests in the sector believed the coming of the refinery would alter the trade flows that encouraged massive importation of refined petroleum products into Nigeria despite the country’s status as a major crude oil producer and exporter.
Dangote explained that he embarked on the project after observing incessant fuel queues and the challenges Nigerians faced procuring fuel.
He identified major challenges faced during the project execution, which began in 2013, as pushback from the oil mafia and enormous cost of building critical infrastructure including port, heavy equipment facilities and a treated water plant.
He said his resolve to help strength energy security in Nigeria, and by extension Africa, encouraged him on the journey.
Dangote said, “We looked at oil. Africa produces oil, but many countries don’t refine it. They export crude and import refined products, which drains foreign reserves.
“In Nigeria, we had fuel queues for more than 50 years. People queued for days during Christmas just to buy petrol in an oil-producing country. Government refineries were not functioning properly, so I decided to take the bold step of building a refinery.”
He added, “We launched the project in 2013. Land acquisition alone delayed us for five years. Some of these obstacles were created by entrenched interests in the oil business – what you might call a mafia – trying to stop us from solving these problems. But we stayed focused.
“When we started, the naira exchange rate was ₦156 to the dollar. At one point it went as high as ₦1,900, but we still continued. We had to build our own port because no existing Nigerian port could handle the heavy equipment. Some individual pieces weighed up to 3,000 tonnes. We built roads, water infrastructure and other facilities from scratch. The refinery alone uses 440 million litres of treated water. Our water treatment section covers more than 30 hectares.”
The billionaire businessman said the challenges encountered during the project were so multi-faceted that he could have shelved the idea if he had prior knowledge.
Dangote stated, “About 67,000 people worked on the refinery project. That’s the size of the town where I grew up. Honestly, we were lucky we didn’t fully understand the enormity of what we were building at the beginning. If I had seen the full scale immediately, I might have chickened out.
“It was like swimming across the ocean. Once you’re in the middle, you can’t go back, so you keep moving forward.
“We got support from African Export-Import Bank, African Finance Corporation, Zenith Bank, Access Bank, United Bank for Africa and other Nigerian banks. We also had strong support from Standard Bank and Standard Chartered. We were very lucky. And when we completed the refinery, the results exceeded our expectations.”
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