Dangote Group’s investment in oil and gas will transform the economy from a single commodity market to a sustainable diversified economy, Chief Executive Aliko Dangote has said.
His mission is to reverse Nigeria’s import-dependency to self-sufficiency in commodities it has spent its earnings to import, the frontline businessman said.
Dangote told a forum of international business leaders and Nigerian business from the Lagos Business School (LBS) at his multi-billion dollars refinery site in Ibeju-Lekki, Lagos, that on completion of the projects next year, 60,000 direct jobs and millions of indirect jobs would have been created.
He said the landscape on which the refinery project was being built is six times bigger than the size of Victoria Island in Lagos. The site of Dangote Petrochemical Project is 10 times bigger than Eleme Petrochemical Industry in Port Harcourt, Rivers State.
Describing the refinery as the largest single-train petrochemical facility in the world, Dangote said the crude oil processing factory is designed to refine 650,000 barrels per day. He said the facility is completely designed for Nigerian crude oil, with flexibility to process products from other countries. He added that he is building Africa’s largest urea plant to produce three million tons of fertilizers yearly.
“Everything we are doing here is basically to transform the Nigerian economy. And it is not only to transform, but to also diversify our economy from single commodity market. We are taking a bold step through this petrochemical project to create values that would help us to achieve this aim.”
Noting that his business had grown from a commodity trading company to a diversified global conglomerate in the last two decades, Dangote said he was pumping huge resources into energy production and agriculture across West Africa to close the deficit in food production and export.
The businessman said his company’s EWOGGS Pipeline Project would unlock significant gas supply to address the country’s energy needs, which he said required billion of dollars annual investment.
Dangote lamented the high cost of electricity supplied to industries, saying his businesses depended wholly on the energy generated by his company, which, he said, is cheaper than public electricity.
He said his company made the greatest impact on the Nigerian economy on investment in cement, which, he said, made the country to move out of import-dependency to self-sufficiency. He said his firm had mapped out strategies to re-create similar feats in agriculture, energy, construction, fertilizer and petrochemical sectors to drive economic growth.
The objective, he said, is to make Nigeria have multiple sources of revenue generation and create a platform for irreversible growth in diverse sectors of the economy.
“What made Nigeria to go into recession was lack of growth. Unless growth is happening in different sectors of the economy, it would be very difficult for the economy to sustain itself. I believe that until Nigeria diversifies its economy, we would be coming out of one problem to the other, because the economy cannot rely on oil alone.”
“We are investing heavily in agriculture and this is one area people don’t understand, the impact of farming on the economy. Ethiopia, as a country, depends largely on agriculture and grows its economy. Its GDP (Gross Domestic Product) did not collapse unlike what we experience in Nigeria, which largely depends on oil. This is a lesson for us. Agriculture is expanding and we have no choice than to implement major restructuring and diversification of the economy.”
Dangote said the success of his company in the last two decades rested on five pillars: investment strategy, which includes identifying where to play, efficient execution of business plans, effective personnel, integration and driving of efficiency across value chain, and local sourcing of raw materials.
He added that he had the habit of taking the risk of investing at the period when investors are afraid of venturing into investment.
Dangote hailed the Federal Government’s FOREX policy, saying there had been over $2.3 billion fresh capital inflow since the reforms were carried out in the FOREX market. He said more capital inflow would be experienced if the government further relaxed the FX policy.
On his expansion across Africa, Dangote said his brand had moved from commodity trading to energy production in Senegal. The company makes extra profit by selling excess energy it generated to Senegalese communities at cheap rate.
Despite improved political stability, settled macro-economic environment and rapidly expanding middle-class in Africa, Dangote said the collapse of commodity prices, huge infrastructure deficit, corruption and low intra-trade agreements remained the bane of the continent’s growth.
He called on African leaders to abolish restrictive visa procedures and tariff regimes, noting that the continent would be shut against foreign investments if its borders were not easily accessible. He cited Angola as an example of countries into which investors might find difficult to venture, because of stringent visa procedure.
The forum featured an interactive session during which the billionaire answered questions from the business executives. There was also a tour of the refinery.