Nigeria Can’t Keep Spending Oil Proceeds From The Future – Dangote

The President of Dangote Group, Aliko Dangote has come out to say that Nigeria needs to stop mortgaging crude oil to ensure the availability of feedstock for local refineries.

He recently had his say at a summit organised by the Crude Oil Refinery Owners Association of Nigeria in Lagos, and Nigerians have been reacting.

According to him, it is so unfortunate that while countries like Norway are putting oil proceeds into a future fund through their national wealth funds, Nigeria and African countries are spending oil proceeds from the future.

He added that Nigeria needs to prioritize the implementation of the domestic crude supply obligation.

His words, “To ensure sufficient feedstock availability we will need to stop mortgaging crude. It is unfortunate that while countries like Norway are putting oil proceeds into a future fund through their national wealth funds, in Africa, we are spending oil proceeds from the future today.

We will also need to prioritise the implementation of the domestic crude supply obligation. We will need to expand crude production capacity to support demand from the refinery.

We built the Dangote refinery without a single incentive from the government. However, to achieve the vision of turning Nigeria into a refining hub for the region, investors need to be incentivised.

It was recently in the news that Scotland’s only refinery will be shut down next year. Shell is converting the 7.5 million tonnes per annum refinery in Germany to a lubricating plant.

So, the opportunities are there. Africa imports about 3 million barrels per day of petroleum products. About half of this volume is imported by countries along the coast from Senegal to South Africa.

These same countries produce over 3.4 million barrels of crude per day, which indeed highlights the problem of the dimension of excess crude production capacity without refining capacity. The imports come from Europe, Russia, and other parts of the world.

So to grab this opportunity, we will need to build 1.5 million barrels per day of additional refining capacity. This would not be an easy feat, and strong support from the government and cooperation between stakeholders would be essential.”