Billionaire industrialist Aliko Dangote has declared that Nigeria’s state-owned refineries in Port Harcourt, Warri, and Kaduna may never function again, despite the government spending over $18 billion on their rehabilitation.
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Dangote made this known on Thursday while hosting members of Global CEO Africa from the Lagos Business School at the Dangote Petroleum Refinery in Lekki, Lagos. He noted that the refineries are no longer viable and continuing to invest in them is wasteful.
He recalled that his company once took over management of the refineries in 2007 but had to return them to the government due to a change in administration. Under his team, the refineries could only produce about 22 percent of Premium Motor Spirit (petrol), a figure he compared to his refinery’s current output, which dedicates over 50 percent to petrol alone.
Describing the government’s repeated turnaround maintenance efforts, Dangote said it is akin to “trying to modernize a car built 40 years ago.”
Former President Olusegun Obasanjo also shares the same view. He revealed that during his administration, international oil companies like Shell turned down offers to manage the refineries. Obasanjo said that Dangote and other investors once paid $750 million to acquire the refineries, but the deal was reversed by the administration that succeeded him.
He criticized the persistent government funding of the refineries, calling them a liability and insisting that they should be fully privatized to end the waste.
The Manufacturers Association of Nigeria and some independent crude refiners have echoed this call for privatization. They argue that selling off the outdated facilities even as scrap would be more beneficial, as the proceeds could be channeled into developing modular refineries.
Despite the federal government’s massive spending – $1.4 billion on the Port Harcourt refinery, $897 million on the Warri refinery, and $586 million on the Kaduna plant, none of the refineries have returned to full operations.
