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Africa News of Friday, 19 November 2021


Can Dangote provide 250,000 jobs at his US$19 billion oil refinery?

Africa's richest man, Aliko Dangote Africa's richest man, Aliko Dangote

The richest black man, Aliko Dangote, is aiming to create more wealth for more Nigerians when his oil refinery begins operation in a few months.

The Dangote oil refinery, the world’s largest single-train refinery, is expected to produce 650,000 barrels per day. The $19 billion project located in Ibeju-Lekki in the outskirt of Nigeria’s commercial capital, Lagos, is projected to create jobs for at least 25,000 Nigerians when it's completed and fully operational, says Group Executive Director of Strategy and Capital Projects at Dangote Industries Limited, Mr. Devakumar Edwin.

The portal has stated that 100,000 indirect employment will be created through retail outlets. The refinery project has employed 40,000 people - 29,000 Nigerians and 11,000 foreigners. The ratio equates to three Nigerians to one expatriate, the portal indicated.

Speaking in an interview on Nigerian channel Arise TV on August 31, Aliko Dangote, the President of the Dangote Group said: “When we started the project, we were supposed to bring a lot of foreign workers, but as we speak today, we have less than 11,000 expatriates. We have about 29,000 Nigerian workers who are getting massive training. We are also creating a lot of capacity in the country, which will be of great help for future oil projects in Nigeria, most especially with the opening up of the oil industry through the new Petroleum Industry Act.”

While the Dangote refinery should be a bonus to the already existing refineries in the country, mismanagement has cost Nigeria a fortune. In the thick of the coronavirus pandemic, all refineries were shut down pending rehabilitation. A year earlier, only the Warri plant was functioning, leading to the loss of some 167 billion naira ($439.47 million).

Currently, Nigeria’s four refineries produce a combined capacity of 445,000 barrels per day. One is located in Kaduna, the north of Nigeria, while three are situated in the oil-rich Niger Delta region at Warri and Port Harcourt. The Port Harcourt refineries consist of two plants with a combined capacity of 210,000 BPD.

In October, 2018, Head of Quality Assurance/Quality Control at Dangote Oil Refinery Company Limited, Rama Rao Putta said during a tour of the facility with top executives of the Lagos Chamber of Commerce and Industry (LCCI) that when operational, the refinery “would lead to the protection of forex revenue of around $16bn a year at current market prices,” adding that it would also help “save $10bn a year through domestic supplies of petroleum products.”

He further stated that the company had completed training of the first and second batches of Nigerian engineers in India and that the employees were being acclimatized at the site.

What Inspired Dangote to venture into oil production?

Dangote said in the same interview on Arise TV that he was inspired by entrepreneurs from India who created five million barrels-per-day oil refineries. According to him, the Asian country lacks the quantity of oil possessed by Nigeria.

"Nigeria has the capacity to produce 2.4 million barrels per day while we import 100 percent of what we consume," he said.

According to him, he tried to venture into oil exploration in 2007, however, the idea was discarded due to limitations placed by the president at the time, Umaru Musa Yar’Adua.

“It makes me feel terrible to see a country as big and resourceful as Nigeria with a high population, importing all its petroleum products. It is very painful,” he added.

Is the creation of 250,000 feasible?

Dangote’s quest to provide jobs for more than 250,000 after the refinery becomes fully operational is a question that can only be answered in the near future.

According to a PwC report, the oil industry in the United States of America supports 9.8 million jobs which make up for 5.6 percent of the total U.S. employment.

In the U.S. states of Texas and North Dakota, oil production obtained from bituminous shale has created high-paying jobs and has boosted the personal economy of persons living in the state. cited that due to oil and gas production, North Dakota boasts of America's lowest unemployment rate adding that in 2013, it was the country’s fastest-growing economy at 7.6 percent.

Aliko Dangote's effective business management and productivity, which have earned him success in his business ventures, are key indicators of the realization of the goal of employing more people in Nigeria. Nigeria's retail market is huge and the highest of any African nation capable of employing more skilled and unskilled youth of the country. Dangote has succeeded in diversifying his businesses from sugar, salt, fertilizer and cement manufacturing and retail among others.

Nigeria's unemployment rate in the fourth quarter of 2020 was 33.3 percent, translating to some 23.2 million people. There is a high expectation from Dangote's oil refinery as Nigeria's economy depends on it.

This article was written by Novieku Babatunde Adeola