CBN Pledges to Meet Forex Requirements for Dangote Refinery
The Central Bank of Nigeria (CBN) has pledged to meet the foreign exchange requirements for the importation of equipment to the Dangote refinery, petrochemical and fertilizer plant, which is being constructed by the Dangote Group at the cost of almost $14 billion.
Speaking on Sunday at the project site in Dangote Free Trade Zone in Lekki area of Lagos, the Governor of CBN, Mr. Godwin Emefiele, stated that when completed, the project would generate $6 billion for Nigerian economy yearly.
Emefiele added that the project would also help the central bank to conserve foreign exchange as close to 40 per cent of the foreign exchange used currently to import fertiliser, petroleum products and petrochemicals would be saved.
“So, you can imagine what would happen to the savings in foreign exchange by the time the fertilizer plant is completed in 2017 and by the time the refinery and petrochemical plant is completed during the early part of 2018. We expect that by the time these projects are completed, they will not only meet the needs of our domestic requirements – by the time they are completed, he (Dangote) will be exporting these products to the point where he will be selling foreign exchange to Nigerians and CBN to the tune of almost $6 billion yearly. That is the kind of project we think we should support and we think that we need to encourage more Nigerians to begin to think like Aliko Dangote,” Emefiele explained.
The CBN governor, who was accompanied by the Deputy Governor of CBN in charge of Economic Policy, Mrs. Sarah Alade, said Dangote should be supported for working to move the country away from being an importer to exporter of fertilizer, petroleum products and petrochemicals.
“This is a time when we are talking about diversifying our economy away from oil. The output from fertilizer plant is Ammonia and Urea; the output from petrochemical is polypropylene and polyslene; the output from the refinery are the petroleum products,” he said. “We are talking about $6 billion in a year. This is a project that is costing about $14 billion, that is, close to N2.8 trillion. He will be selling $6 billion to Nigerians in a year. So, in two and a half years, he would sold dollar to us even more than we will probably give to him, indeed, we are not even selling $4 billion to Aliko Dangote. If he wants Naira, we will give him Naira at concessionary prices. If he want dollar to import the equipment, we will give him,” Emefiele added.
Also speaking, the President of Dangote Group and Africa’s richest man, as well as foremost industrialist, Alhaji Aliko Dangote said he embarked on the refinery, petrochemical and fertiliser business to conserve foreign exchange for Nigeria and at the same time ensure that the country meets her domestic requirements. “We have actually been doing this for a very long time to diversify the economy. The government will lay down the policies. The CBN will assist in terms of long term funding through the banks and even directly now because they have actually helped us quite a lot. That is what we are now trying to do,” Dangote said.
Dangote noted that the 650,000 barrels per day refinery would not only meet the country’s domestic requirements for petroleum products but will also make the country a net exporter in West Africa. “Today, Nigeria imports 100 per cent of their fertilizer but when we finish, Nigeria will be the largest exporter of Urea and Ammonia in Africa. This is the kind of transformation that we are looking for,” Dangote added.
“The refinery is the largest single line in Africa and it will meet our total domestic requirement and save foreign exchange. Total almost 38 per cent of CBN’s foreign exchange is spent on importation of petroleum products. But we can serve the whole West African market. Our own polypropylene is 100 per cent imported today but we are going to serve the whole domestic market in the next 10 years and also export,” Dangote said.
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