“Nigeria will soon become the biggest and only urea exporter in sub-Saharan Africa for the first time,.. And we are not only exporting, we are exporting big time. ” – Aliko Dangote.
By far, the most important industrialization project in Nigeria today is the Dangote Refinery project. At least in the short- and mid-term horizons, the impacts could be catalytic and consequential. It is a perfect playbook of playing upstream, driven by accumulated capabilities. The Dangote Refinery is the Nigerian Project because the government has none, and we can all go with it. It is a big call: US$15 billion is massive and could change the destinies of people, at scale.
But this is reshaping, just like most BIG Nigerian projects. After a webinar this week, this refinery project is now coming live in 2021. Recall, it was billed for a 2016 launch, then 2019 and now 2021! Some think 2023 …This project has to work. “Still, the project has been hit by delays with the initial opening date having been projected to be 2016, then 2019. Edwin said in a webinar on Thursday that the start of operations will now be pushed back to late 2021 due to the coronavirus. Citac says the facility is unlikely to start before 2023″, writes Bloomberg. While there are concerns, the Dangote Refinery, at least in the short term, is a promise.
The Dangote Refinery is “entering a very competitive market at a time when refining margins are being squeezed by the collapse in oil prices. In July, profit margins for refineries were at their lowest since 2010 and Patrick Pouyanne, the chairman of Total SA, described them as “absolutely catastrophic. To be successful, the refinery will also need to displace the cartels that have dominated Nigeria’s fuel-import business for more than two decades, a source of wealth for the politically connected and motivation for the continuing dysfunction of domestic refineries,” notes Bloomberg.
While this is a “Nigerian project”, the execution cannot be like Nigerian projects (think Ajaokua steel, Second Nigeria Bridge, etc). Mr. Dangote must make this project work, it cannot be delayed further!
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In these ever changing and unpredictable times, two years could be the difference between substantial gains and monumental losses, things happen so quickly in our time.
Nobody knows how much oil will be trading by 2023, the price of oil determines a lot in this kind of project. You do not simply do big stuff because you love doing them, there must be clear pathway to profitability and survival; delays can erode all of that. It is coronavirus in 2020, we haven’t been told what we would be taking covers for in few years time; they all add up.
Somehow, it’s beginning to look like Nigeria is never destined to achieve energy sufficiency, be it electricity or petroleum products, the dynamics might keep changing. So, even when we finally announce our readiness, the world might declare the very thing to be dangerous and unsafe for humanity, reducing all our toils and hardwork to rubble.
Whatever project you have, velocity matters, else everything could be obsolete on the launch date.
We keep believing…