Emefiele: Inflation Pushed Dangote Refinery Project Cost to $15bn

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The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele yesterday disclosed that inflation had pushed the cost of building Dangote Refinery and Petrochemical Plant and other projects from $12 billion to $15 billion.

Emefiele, also, revealed that Dangote Group, a Nigerian multinational industrial conglomerate, had sealed agreements with the Nigerian National Petroleum Corporation (NNPC) and other oil producing multinationals to purchase crude oil locally to feed the 650,000-barrel-per-day refinery.

He made this disclosure yesterday at a session with journalists after an inspection of the Dangote Refinery and Petrochemical Plant and Fertilizer Plant in Lagos alongside the country’s leading captains of industry.

Emefiele inspected the facility in the company of President of Dangote Group, Alhaji Aliko; Chairman of Geregu Power Plc, Mr. Femi Otedola and Chairman of Channels Television, Mr. John Momoh, among others.

At the session with journalists, Emefiele said: “As far as I know, as at the last count, in terms of the cost of this project, it may be close to $15 to $16 billion at this time.

“When this project was contemplated, when it was still on the drawing board about six years ago, before it started four years ago, it was meant to be about $7.5 billion.

“That time, $3.75 billion was to be raised by equity himself (Dangote), and then, local banks -$1.75; I think foreign banks -1.75 billion. And like you heard, this project cost has now moved up to over $15 billion.”

The apex bank said Dangote had assured him that the purchase of Nigerian crude by the refinery would not affect Nigeria’s 1.6 million barrels per day mandatory export volume as allocated to it by the Organisation of Petroleum Exporting Countries (OPEC).

He disclosed that Dangote Group would actualise upon the discussion and agreement between Dangote and its suppliers, mainly Nigerian National Petroleum Corporation (NNPC) and oil producing companies in the country.

CBN’s governor said by buying crude in Naira and selling refined petroleum products in Nigeria in naira, the company would save the country a lot of foreign exchange and help to strengthen the local currency.

“By being a country that is lucky to have a refinery of this size, what you will find is that, I think Nigeria’s production capacity right now by the OPEC arrangement is about 1.6 million barrels per day.

“Because we are going to be refining locally, Nigeria will continue to export its 1.6 million barrels per day. That is what Dangote said and this 650,000 barrels per day. That is based on agreement and discussion with NNPC or with other oil producing multinationals operating in the country.

“Dangote could buy his crude in naira, anchored in the platts and refine it and produce it for Nigeria’s use in naira. So, that is where the element where FX is saved for the country becomes very clear,” Emefiele said.

He also said he was optimistic that by refining in Nigeria, all the cost associated with demurrage for import as well as the costs associated with freight will be totally eliminated.

According to him, that will make the price of petroleum products cheaper in naira in Nigeria.

He noted the refinery, which will be producing more than the country’s requirement for white products, would equally create opportunities for Nigerian investors to start acquiring small vessels and begin to buy from the refinery in naira to export to other African countries.

While such an arrangement will increase the volume and revenue in Naira for Dangote Refinery, however, Emefiele pointed out: “As a central banker, it means it is helping to push Naira into the ECOWAS subregion as a currency. That is a big matter of interest for me. So, you cannot almost quantify the benefit from having this refinery in Nigeria.”

He said inflation, based on what Dangote told him, had pushed the total cost of the refinery and other projects to over $15 billion at the moment.

CBN’s governor acknowledged that the projects would save about 41 per cent of foreign exchange spent on importation, noting that the projects were a testament of Dangote’s commitment to save Nigeria.

By this time next year, Emefiele disclosed that Nigeria’s cost of importing petroleum products, polyethylene, polypropylene, fertiliser or other ammonium products, currently being imported, would be saved.

As a result, according to CBN’s governor, Nigeria’s reserve will be saved.

Emefiele said: “It will help us so that we can begin to focus on importing more importantitemsthat we cannot produce in Nigeria today. I have always said it and in the last four years I have said it on every trip that this project that Dangote has embarked upon, the Central Bank of Nigeria has over N100 billion commitments in the intervention.

A former Governor of the Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo yesterday said he was ready to service Anambra State, his home state after serving Nigeria and the world in different capacities for decades.

Likewise, a former Special Adviser to ex-President Goodluck Jonathan on Technical Matters, Mr. Akachukwu Nwankpo also indicated interest in the election scheduled for November 6, tasking the All Progressives Grand Alliance (APGA) to conduct a credible primary election.

The two aspirants, who are seeking APGA’s nomination, disclosed their aspiration in separate news conferences yesterday with promises to deploy their competency, experiences and social contacts to develop and serve Anambra State.

While Soludo addressed journalists in Awka, the Anambra State capital with a clear mission statement, Nwankpo unveiled his governorship aspiration in Okija, Ihiala Local Government Area (LGA) expressing confidence he would defeat the CBN’s former governor.

Speaking in Akwa yesterday, Soludo explained his quest to become the governor of Anambra State, noting that he was seeking the office “not to enrich himself or better his life, as God has blessed him with everything he needs.”

Soludo, a renowned professor of Econometrics, added that he “is in the governorship race because I believe God did not make a mistake by making me an Anambra indigene. I have finished serving with the world.

“I have also done my bit in Nigeria. I now want to help develop my own state. I am not running for this election so that I can make money or so that I can enhance my curriculum vitae. I am in this race to develop my home state.

“In my 30s, I achieved everything that every man wanted to achieve. I have travelled to all continents of the world and consulted for over 20 top financial institutions of the world. I am here to change the state for good.

“If anyone thinks that governance is about going to Abuja to collect money, use part of it to pay workers and use the rest to award contracts, then that person is mistaken. If that is what governance is about, I will not be in the race because that is something my grandmother can do.

“We are talking about using our contacts all over the world to generate funds that we can use to develop our state at little or no cost to us. It is something I can do, and by the way, I have not seen anyone who is in the race, who has the contacts I have or even the pedigree.

“We have touched many institutions and they changed. It is time to touch Anambra. After all the work I have done in various places, I asked myself what else I can do as a sign of gratitude to God, I said let God use me as a gift to change Anambra State. That is why I am here,” Soludo said.

Also at a session with journalists yesterday, Nwankpo said he would defeat Soludo if the APGA conducted a credible, free and fair primary election.