In a compelling analysis of Nigeria’s economic landscape, Bismarck Rewane, the Managing Director of Financial Derivatives Company Limited, has highlighted the paradoxical nature of exporting crude on Forward Contract without supplying the indigenous powerhouse, Dangote Refinery.
During a live appearance on Channels Television’s Business Morning show on Tuesday, Rewane articulated the economic incongruity of such a practice and underscored the transformative potential of the Dangote Refinery on the nation’s financial and industrial sectors.
Securing its maiden cargo deal comprising approximately six million barrels, the Dangote Refinery is poised to revolutionize the dynamics of the country’s crude oil utilization.
According to Rewane, the refinery’s capacity to acquire crude in Nigeria, refine it domestically, and subsequently export refined petroleum products to West African nations is a strategic imperative for the nation’s economic advancement.
“It doesn’t make sense for Nigeria to be exporting crude on Forward Contract and not be able to refine its own product for its own citizens and for West and Central Africa, it doesn’t make sense,” emphasized Rewane.
This candid observation points to the inherent contradiction in exporting a valuable resource while neglecting the opportunity to refine it locally for broader economic benefits.
Highlighting the economic significance of the Dangote Refinery, Rewane projected its potential listing on the Nigerian Stock Exchange in 2024-2025.
The estimated investment of $19 billion to $20 billion in the refinery, once listed, is anticipated to increase the market capitalization of the Nigerian Stock Market by a substantial 60 percent.
The economist further elaborated on the broader impact of such an investment, emphasizing that the Dangote Group, which owns the refinery, contributes significantly to the nation’s economy. With an annual tax payment exceeding N146 billion and dividends totaling N357 billion, the refinery emerges as a pivotal player not only in the energy sector but also as a catalyst for economic growth and financial inclusivity.
“It is not a capitalistic investment, but it is democratizing the process of shareholders, just like when MTN was a private company,” noted Rewane.
Drawing a parallel with MTN, he highlighted the transformative power of democratizing ownership, making companies like the Dangote Refinery a source of national pride and economic empowerment.
Situated in Lagos and owned by Africa’s richest man, Aliko Dangote, the refinery is slated to commence operations in December, boasting a daily processing capacity of 350,000 barrels.
As it sets the stage for a new era in Nigeria’s oil and gas industry, the Dangote Refinery stands as a testament to the nation’s commitment to self-sufficiency and economic prosperity.
