Why NNPC 20% equity stake in Dangote refinery would cost Nigerians

By Yusuf Olawale

It was love at first sight for the Nigerian people when the African richest man, Aliko Dangote, in September 2013, announced the commencement of the construction of Africa’s biggest single-train refinery with a proposed delivery of 650,000 barrels per day.

The project was initially poised to start delivery in 2016. Due to sampled uncalculated delays, poor planning, and lack of centralized project management, the project has now become a tall order for Mr. Dangote.

Given this, the project initially valued at 9 billion dollars is now valued at 19 billion dollars by the Nigerian National Petroleum Commission (NNPC). Albeit, there are conflicting opinions from industry experts in terms of how much it would cost to build the size of such a refinery in current Nigeria, it all bores down to the fact that the Dangote refinery is now an albatross to the Nigerian government.

With banks calling for their loans and fund restructuring for the third time seems not coming in sight, and rising debt of 7 billion dollars with debt servicing of 700 million dollars per annum, Mr. Dangote is left with no option than to seek innovative ways including state capture, political support, etc, to revive the refinery project from becoming a failed project.

Recently, NNPC under some obscure interventions posed itself to be a good samaritan in its announcement of a 20% equity stake in the Dangote refinery, at a value tuned at 3.8 billion dollars. NNPC further explained that it is only giving 1 billion dollars in cash and 2.8 billion dollars in crude.

While this looks gratifying and pleasurable, it is far away from the reality of things Mr. Dangote is currently facing. The 1 billion dollars cash relief cannot service one year’s interest, coupled with the failure and unwillingness of banks to restructure loans for Mr. Dangote in the face of the current estimated project completion date at 2024/2025.

No doubt, this kangaroo relationship between NNPC and Dangote has now become clear and crystal with the recent controversial PIB bill currently before the National Assembly.
It is now open to Nigerians that the move to monopolize the importation of petroleum for Mr. Dangote is to enable him to make excessive profits to settle his rising debt profile.

This by fact will be at the expense of the Nigerian people with huge foreign exchange taken at concessionary rates from the CBN and the unceasing parallel slip of the naira to the dollar.

These manipulations are indeed clear acts from the political house as they are keen to subvert the interest of the Nigerian people for the Dangote refinery to stand.
Will it be nice to say that the politicians are serving Dangote other than Nigerians?

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