Aliko Dangote, Africa’s richest man and President of the Dangote Group, has said the government-owned refineries in Nigeria may never work again, even after spending billions of dollars on them.
Dangote made this statement on Thursday when he hosted members of the Global CEO Africa group from the Lagos Business School at his Dangote Petroleum Refinery in Lekki, Lagos.
He said the Nigerian National Petroleum Company Limited (NNPC) has spent about $18 billion on the Port Harcourt, Warri, and Kaduna refineries, yet they are still not working.
“I don’t think, and I doubt very much, if they will work,” Dangote said.
He compared the repairs of the old refineries to modernising a 40-year-old car.
“Even if you change the engine, the body will not be able to take the shock of that new technology engine,” he added.
Dangote explained that he once bought the refineries in 2007 under President Olusegun Obasanjo, but returned them after Obasanjo left office. His successor, President Umaru Yar’Adua, cancelled the sale after NNPC officials said the refineries could still be repaired.
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According to Dangote, “They said they just gave them to us as a parting gift or so… and as of today, they have spent about $18bn on those refineries, and they are still not working.”
Former President Olusegun Obasanjo has also spoken out about the failures of the refineries. He said he warned Yar’Adua that NNPC could not manage the refineries.
“I told my successor… when you want to sell them, you will not get anybody to buy them at $200m as scrap,” Obasanjo said.
He accused NNPC officials of corruption, saying, “NNPC knew they could not do it… they put pressure. In a civilised society, those people should be in jail.”
Obasanjo also said international oil companies like Shell refused to manage the refineries, showing they believed the facilities were not worth saving.
“If a company like Shell tells me what they told me, I will believe them,” he said.
The comments come just months after the NNPC shut down the 60,000 barrels-per-day Port Harcourt refinery again, six months after declaring it operational. The Warri refinery also shut down a month after it was reopened.
Many experts and groups have called on the Federal Government to sell off the refineries. The Manufacturers Association of Nigeria described the facilities as a ‘drain’ on the economy. Crude refiners also advised that they be sold as scrap and the money used to fund smaller modular refineries.
“Despite several funding efforts, including $1.4bn for Port Harcourt in 2021, $897m for Warri, and $586m for Kaduna, the refineries remain unproductive. Over N100bn was spent in 2021 alone, with N8.33bn reportedly spent monthly. Between 2013 and 2017, Nigeria spent $396.33m on turnaround maintenance.”