Aliko Dangote, president of Dangote Group, signs a $3 billion loan syndicated by Nigerian banks to build a refinery and a fertiliser plant in Nigeria
| By Vincent Nzemeke | Sep. 16, 2013 @ 01:00 GMT
THE Nigerian petroleum industry got a boost on Wednesday, September 4, as Aliko Dangote, president of Dangote Group, signed a $3 billion loan with some local and international banks to build a refinery and a fertiliser plant in Nigeria.
The refinery, which is touted to be the biggest in the country, will cost about $9 billion and generate as much as 9, 500 direct and 25,000 indirect jobs. The refinery is also expected to reduce the volume of imported fuel to about 50 percent while the fertiliser factory is also expected to end the importation of fertilisers. It is expected that the new refinery which will be located in Ondo State will refine about 400,000 barrels of crude oil per day and also produce other petroleum products from local resources. The projects are to be bankrolled by a 3 billion equity and 6 billion loan capital.
The signing ceremony of the project which held at the presidential villa in Abuja, was attended by Namadi Sambo, vice president, Diezani Alison Madueke, petroleum minister, Sanusi Lamido Sanusi, Central Bank of Nigeria, CBN, governor and executives of the participating banks which include First Bank of Nigeria, United Bank for Africa, UBA, Stanbic-IBTC, Zenith Bank, Access Bank, Ecobank, Fidelity Bank, Guaranty Trust Bank and Rand Merchant Bank.
The refinery, according to Dangote, will place Africa on the global map as a valued contributor of natural resources and a competent manufacturer of refined products and fertilisers. He added that his organisation “is willing to invest in sectors that are capable of building Nigeria’s economy and generate jobs for people.”
Dangote also urged investors to have faith in Nigeria’s economy, adding that the proposed refinery would end the importation of fuel by 2016. “Nigeria is going to be taken out of the list of countries that import petroleum products. We will produce 20 million metric tonnes of fertiliser which is currently equivalent to what Nigeria consumes currently,” he said.
Nigeria currently spends about $30 billion annually on the importation of petroleum products. The execution of the project will not only put an end to the corruption associated with fuel importation, but also create jobs for about 85,000 Nigerians including 8,000 engineers at the initial stage.
Sambo extolled Dangote and his company for helping in the implementation of the economic agenda of President Goodluck Jonathan’s administration. He added that business now thrives in Nigeria because the present administration had created an enabling environment.
On his part, Sanusi also lauded the Dangote Group for its unwavering commitment towards driving the economy through investments. The CBN boss described the refinery deal as monumental, adding that it was made possible because banks in the country were in a healthy financial state. “This is a very historic day in the history of Nigeria. It worked because banks in Nigeria are healthier and the government is serious in its determination to discourage importation and encourage local manufacturing.”
Segun Agbaje, managing director and chief executive officer of Guaranty Trust Bank, one of the participating banks, said “the deal remains the largest syndication by banks in Nigeria.” He said if successfully implemented, the project will benefit the Nigerian economy in a lot of ways.
Bola Adesola, chief executive officer of Standard Chartered Bank, another participating bank in the deal, said: “This project is an historic example of self-empowerment and leadership for the continent as a whole – and is made possible through effective partnerships between the Nigerian private sector, government and international financial institutions.”
Jonathan also praised Dangote for the initiative to establish a refinery in the country. In a statement by Reuben Abati, special adviser on media, Jonathan said the investment in refining, petrochemicals and fertiliser production would contribute significantly to the attainment of his government’s priority objective of job creation.