Article summary

  • The official commissioning of the Dangote Petroleum Refinery in Ibeju Lekki, Lagos took place on May 22, 2023, with high-profile attendees including President Muhammadu Buhari.
  • The refinery is expected to address Nigeria’s indigenous oil processing challenges.
  • Positive implications of the refinery include boosting industrialization in the Ibeju-Lekki area, attracting companies to establish offices, and creating a commercial hub.
  • However, negative implications include the strain on road infrastructure, as ongoing construction and increased traffic from the refinery and Lekki deep seaport may cause congestion.

Monday, 22nd of May, 2023 marked the official commissioning of the much-awaited Dangote Petroleum Refinery located in Lekki Free Trade Zone, Ibeju Lekki, Lagos.

The event, which had an array of dignitaries in attendance including the outgoing President of the Federal Republic of Nigeria, President Muhammadu Buhari, marked the first day of operation for the refinery that many hope will solve Nigeria’s indigenous oil processing problems.

However, while the lack of a working indigenous refinery within the country has been long lamented, the presence of this refinery within the Ibeju Lekki environs is bound to have implications for real estate development in the area.

As such, in this article, we explore the positive and negative implications of the Dangote refinery on the Ibeju Lekki axis. Some of them are highlighted below.

Boost industrialization and establish a commercial hub in Ibeju-Lekki

It’s a well-known concept that infrastructure projects encourage industrialization within the area which then extends to widespread developments for neighboring communities. As such, the presence of a mega infrastructure project like the Dangote petroleum refinery coupled with the appeal of the Lekki Free Trade Zone is bound to boost industrialization in the Ibeju-Lekki-Epe axis.

This appeal will extend to companies from the petrochemical industry, encouraging them to establish offices within the axis thus creating a commercial hub. This will have positive economic ramifications for Ibeju Lekki and Lagos – boosting the profile of one of Africa’s richest cities.

Growth of real estate value in the area

As the Lekki area experiences infrastructural developments, it boosts the appeal of the area for commercial and residential developments. This in turn will positively impact the Ibeju Lekki real estate market as high demand will cause a rise in the real estate value of the market.

So far, the price of land in the Lekki environs has an average growth rate of 55.9% in the past five years, as a result of the planned infrastructure projects. That rise is expected to continue, barring any unseen events.

But there are also some negative implications, as highlighted below.

The greater burden on the road infrastructure

While infrastructure projects have positive implications, their impact can be negative if sufficient preparation hasn’t gone into making the environment ideal to host them.

This is the case for the refinery, as the roads leading up to the Ibeju-Lekki-Epe axis such as the Ibeju-Lekki-Epe expressway are under construction thus causing traffic congestion around the area and hindering free movement of motorists.

The commissioning of the refinery coupled with the operations of the Lekki deep seaport will require the heavy utilization of the roads by tankers, thus increasing the burden on the roads and worsening the state of traffic within that axis.

Proper road construction and maintenance or the introduction of bridges and flyovers will be required to avoid the presence of potholes and gridlocks and diversify viable route options.

Pollution from the refinery could impact the standard of living

While the refinery will attract investment in commercial real estate in that area, the presence of fumes and soot from the refinery will make the area less than appealing for residential developments.

Although the Lekki Free Trade Zone has been designed so the refinery is far removed from the residential cluster, the volume of the fumes and direction of travel cannot be predicted. In addition, the noise generated by the machines and safety concerns could further impact the take-up of residential developments within the area.

Proper Preparation Needs to go into Infrastructure Projects Planning

In conclusion, while infrastructure projects are a key component of the development of a city like Lagos, they don’t exist in a vacuum, so stakeholders need to assess the potential impact of these projects. By doing this, they can implement measures that mitigate potentially negative repercussions.

For instance, it would have been more astute to complete the construction and expansion of the roads within this axis to easily accommodate the traffic inflow before completing the Deep sea port and the refinery.

That said, we anticipate government priorities will be towards h completing the roads to ease the burden of mobility while also putting measures in place to curb pollution within the area.

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Author: Bisi Adedun