Dangote Says Africa Could Stop Petrol Imports by 2030
- Aliko Dangote is set to break ground on a $16 billion, 700,000 barrels-per-day refinery in Lamu, Kenya
- Dangote dismissed legal and environmental opposition to the project, saying it would not stop construction from going ahead
- The billionaire warned that Africa is losing jobs and economic value by exporting raw materials instead of processing them locally
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Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Nigerian billionaire Aliko Dangote has predicted that African countries will largely stop importing refined petroleum products from outside the continent by 2030, as he prepares to launch a major refinery project in Kenya.
He spoke in Nairobi ahead of the groundbreaking of the 700,000 barrels-per-day facility, valued at $16 billion, which is set to be commissioned in Lamu on Kenya's Indian Ocean coast on Wednesday, with construction expected to run for about 30 months.
Source: Getty Images
He said:
"By 2030, the majority of African countries will be self-sufficient. It does not matter where it is refined, but it should be in the African continent, on the soil of Africa. Africa would no longer need to import fuel from outside the continent."
Dangote responds to opposition
The Lamu project has not been without pushback. A land rights court case and environmental concerns raised by groups including Greenpeace have drawn attention to the site. Dangote brushed aside those challenges, saying they would not derail construction.
He said:
"There's actually no problem with these sorts of cases. There are people who don't want the development of Africa."
Questions have also been raised about whether East Africa, where countries such as Kenya, Tanzania and Mozambique are still developing their oil and gas sectors, can reliably supply crude to the facility.
Dangote said the refinery was designed to draw crude from several sources, including the Middle East and the United States, while remaining ready to process crude from African producers as their output grows.
A foundation for broader industrial growth
Despite its scale, Dangote described the 700,000-barrel-per-day capacity as modest relative to what Africa will ultimately require.
He said:
"When you talk about 700,000 barrels per day, it's actually small. For the region, it's a big refinery, it's a big investment, but it is a start-up."
He indicated that the refinery was intended to anchor a wider industrial cluster rather than stand alone.
He said:
"This refinery is not all we are going to do there. It's just the start… You will see the number of industries that will come around the refinery."
Source: Getty Images
Dangote argued that Africa cannot afford to keep exporting unprocessed raw materials while buying back finished products at full market value.
He said:
"The biggest problem is that we export raw materials at maybe 5 to 10 per cent of its value, and then we end up buying at 100 per cent of their value.
"We are exporting jobs, because when we keep exporting raw materials, you are creating jobs out there. And when you buy finished products from them… you are importing poverty, because you are not actually creating any jobs here."
He also pointed to recent threats by US President Donald Trump to restrict diesel exports as a sign of the risks African nations face by relying on external suppliers for essential energy products.
Dangote Refinery dividends
Earlier, Legit.ng reported that Shareholders in Dangote Petroleum Refinery could receive dividends in US dollars, a senior company executive has disclosed as the company courts investors for its initial public offering (IPO).
Devakumar Edwin, Vice President of Dangote Industries Limited, said the plan was declared by the group's President, Aliko Dangote, and would be supported by the refinery's foreign exchange earnings from exports.
Edwin disclosed this on Friday during a media tour and briefing at the refinery.
Source: Legit.ng
