- The Dangote refinery could help achieve macroeconomic stability in Nigeria, but it cannot eradicate all the problems in Nigeria’s oil sector.
- The startup of the Dangote refinery could de-bottleneck the oil sector and increase human, labor, and capital stock productivity.
- Nigeria needs to use its oil revenues wisely, to create a better future, especially as the world is moving toward renewable energy technologies.
The Chief Executive Officer of Financial Derivatives Company Limited, Bismarck Rewane has said that the Dangote refinery is a major milestone on the path towards achieving macroeconomic stability. He stated this during an interview earlier today, May 20 via Arise TV.
During the interview, Rewane highlighted the Dangote refinery as a necessary tool to solve some of the challenges in the oil sector, however, he maintained that the 650,000 barrels per day refinery is not the solution to all the challenges in Nigeria’s oil sector. He said:
- “People spend half of their time trying to queue up for petrol and queue up for everything because of the bottlenecks in this sector. If one project can de-bottleneck a particular sector, we would have increased the probability of having higher productivity – both human, labor, and capital stock productivity significantly.
- “Therefore, we could see maybe down the road, a spike in GDP growth maybe from 2 or 3% averagely to around 4 or 5% because of the de-bottlenecking of this sector which is critical to Nigeria’s economic fortunes.”
While addressing the issue of oil and gas becoming obsolete because of the advancement of renewable energy technologies, Rewane said it will take a long time for the oil and gas industry to become inactive, especially in an oil-producing country like Nigeria which is reliant on revenues from the sector.
According to Rewane, oil is the golden goose for Nigeria, and we need to tap and utilize the resource now. However, he highlights the fact that the important question is what is being done with the funds that come from the oil we are producing? He said:
- “If we use it wisely, then, there is a future, but if it is used stupidly, then that will be a missed opportunity and Nigeria quite frankly cannot afford missed opportunities at this time.”
What you should know
In October last year, the Group Executive Director, Strategy, Portfolio Development, and Capital Projects at Dangote Industries Limited, Mr. Devakumar Edwin, said the Dangote refinery would stimulate economic development in Nigeria because it could meet 100% of the Nigerian requirement for all liquid products.
These products include gasoline, diesel, polypropylene, kerosene, and aviation jet fuel. He also said the refinery can provide a surplus of each of these products for export, noting that the high volume of petrol output from the refinery would transform Nigeria from a petrol import-dependent country to an exporter of refined petroleum products.