Africa's richest man and President of Dangote Industries Limited (DIL), Alhaji Aliko Dangote, last week promised to reduce by 50 percent the importation of refined petroleum products for local consumption by 2016.
This he hinged on the takeoff of his refinery, petrochemical and fertilizer complex in Nigeria, which will be financed with a $3.3 billion credit facility from a consortium of banks.
Africa's richest man and President of Dangote Industries Limited (DIL), Alhaji Aliko Dangote, last week promised to reduce by 50 percent the importation of refined petroleum products for local consumption by 2016.
This he hinged on the takeoff of his refinery, petrochemical and fertilizer complex in Nigeria, which will be financed with a $3.3 billion credit facility from a consortium of banks.
Dangote and the banks had last week signed the agreement for the project, which is expected to be Africa's largest refinery, petrochemicals and fertilizer manufacturing complex.
Guaranty Trust Bank Plc (GT Bank) and Standard Chartered Bank led nine other banks for the $3.3 billion syndicated facility. GT Bank was the local coordinator, while Standard Chartered Bank was the global coordinator for the deal.
The other banks involved in the transaction are Access Bank Plc, Zenith Bank Plc, Ecobank Nigeria Plc, Fidelity Bank Plc, First Bank of Nigeria Limited, Standard Bank of South Africa Limited, United Bank for Africa Plc (UBA), First City Monument Bank Plc and Diamond Bank Plc.
The project, which will cost a total of $9 billion, is expected to create about 9,500 direct and 25,000 indirect jobs, in addition to reducing the current volumes of refined fuel imports by about 50 per cent and effectively stopping the importation of fertilizer. The project would be financed by $3.5 billion equity from the Dangote group and $6 billion loan capital.
In his address at the signing ceremony in Abuja, Dangote said with a refining capacity of the proposed refinery, which is expected to reach 400,000 barrels of crude oil per day and produce a variety of refined fuel products from local crude resources, Nigeria would cut its current volume of imported fuel products by a massive 50 per cent.
"The 2.8 million tonnes of urea will be channeled into growing the local agriculture sector which is essential in producing healthy crops and promoting Nigeria and West Africa's agricultural development.
"The petrochemical plant will produce polypropylene, which is a common component of most plastic and fabric products. For example, it is used in various forms of packaging, ropes and agro-sacks.
"This plant will further entrench Africa's role on the global map as not only a valued contributor for natural resources, but also a competent manufacturer of refined products and fertilizer.
"As a result, several African nations will be less reliant on importing fuel and fertilizer from foreign markets, reducing the negative impact of negotiating terms within increasingly turbulent international markets," he added.
Vice-President Namadi Sambo, who was the special guest at the ceremony, applauded the Dangote Group for supporting the economic agenda of the President Goodluck Jonathan administration, saying the government has created the enabling environment for businesses to thrive in the country.
Similarly, Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, said the planned Dangote refinery was for the whole world to note that the Nigeria economy is working.
In his remarks, Central Bank of Nigeria (CBN) Governor, Mallam Sanusi Lamido Sanusi, said the transaction showed that Nigerian banks were healthy, while attributing the development to the banking sector reforms.
He also called on the federal government to discourage importation and encourage local manufacturing. "Nigerian banks will lend to the real sector when a bankable project appears because they have the capital, liquidity and personnel but the loans and the structures have to be right.
"All too often, we fail to mention that progress has been made. Today as part of this project, the CBN is availing the Dangote Group with N50 billion through the banks at no more than seven per cent for a term of 15 years; and we have always said that we don't have any ideological opposition to subsidies but we oppose subsidies for imported consumption.
"We will not subsidize those who are importing petroleum products but we will subsidize those who are building refineries because every time we subsidize imports, we create jobs abroad, lose foreign exchange and set the foundation for the weakening of our economy.
"So we need to redefine those subsidies, start exporting what we produce and importing what we cannot produce; we have no business importing petroleum products or tomato pastes, fertilizer or cassava and this is one of the key steps we need to start this. We congratulate the Nigerian banks," he said
In his remarks, GT Bank Managing Director/Chief Executive Officer, Mr. Segun Agbaje, said: "This is the largest syndication by banks in Nigeria and it is being undertaken with the knowledge that the successful implementation of Dangote refinery and fertilizer project will have far-reaching implications for Nigeria's economic growth."
Agbaje further stated that GTBank was very proud to be associated with Dangote Industries on the project and praised Dangote for his steadfastness, hard work and genuine desire to see remarkable economic improvement within the country.
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