Africa, Energy, News, Oil

African Development Bank Supports Greenfield Oil Refinery

The African Development Bank (AfDB) has recently approved a loan of USD 300 million USD to Dangote Industries Limited for the construction and day-to-day running of a greenfield crude oil refinery and a greenfield fertilizer manufacturing plant. Both projects will produce for consumption in Nigeria and neighbouring African countries allowing Abuja to slowly become self-sufficient energy-wise and transform the country into an important exporter. The project is also expected to create up to 30,000 jobs during the very construction and almost 3,000 additional jobs in operations. The Nigerian oil industry is among major contributors to the country’s gross domestic product, accounting for much of the federal government revenue and foreign exchange earnings. Nigeria is the no. 1 crude oil producer in Africa with production close to 2.2 million barrels a day. The paradox is that Abuja imports huge amounts of refined petroleum products and fertilizer products for its domestic use.
The Dangote Group was founded in the late 1970s and its initial business was importing milk, flour, sugar, cement, iron rods, and rice. The company has transformed into a conglomerate with diversified business interests in salt, sugar, port operations, packaging material production, real estate, and cement. The projects that the AfDB is about to finance are supposed to bring value-added to local natural resources and their sustainability as well as double Nigeria’s refining capacity, reduce by more than 80 percent current imports of fuel in the country, and decrease and eventually get rid of fertilizer imports. Both projects should also help Nigeria out on forex savings of 65 billion USD through import substitution and provide revenues for taxes and fees. The project is financially covered by the AfDB’s Agriculture Transformation Agenda.

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