confidentially speaking
The Africa Confidential Blog
Dangote refinery starts up and points to Nigeria's missing investors
Blue Lines
The start of production this week, after years of delay, of the Dangote Group's US$18.5 billion oil refinery opens a brave new world for Nigeria's oil and gas sector, after 50 years of dependence on refined petroleum products from Europe. The refinery will initially produce diesel and aviation fuel, then ramp up production over the next year or more to reach 650,000 barrels a day of refined products, including petrol.
Aside from the new jobs created at the plant in Lagos, the refinery could transform Nigeria's economy and energy sector, cutting imports massively.
Aliko Dangote thanked President Bola Ahmed Tinubu on social media for his support and encouragement, but relations between the two have deteriorated badly. The Dangote Group is under investigation by the Economic and Financial Crimes Commission and its Lagos offices were raided at the beginning of the year by anti-corruption investigators in relation to US dollars secured by Dangote from the central bank, which is the centre of a wider investigation.
Beyond the Dangote-Tinubu animus lies a bigger question about the lack of investors in Africa's biggest economy. Dangote says the commercial viability of the refinery would demonstrate Nigeria's capacity to build and run major capital projects. If that holds, why are more leading investors leaving the market than entering it?
