Africa’s richest man, Aliko Dangote, has cast serious doubt on the future of Nigeria’s three state-owned refineries – Port Harcourt, Warri, and Kaduna – saying they may never work again despite the staggering $18 billion already spent on their rehabilitation.
Dangote made the remarks during a tour of his Lekki-based Dangote Petroleum Refinery with members of Global CEO Africa from Lagos Business School. He expressed frustration over the inefficiency of the Nigerian National Petroleum Company Limited (NNPC), which manages the troubled refineries.
According to him, over 50% of output from his 650,000 barrels-per-day refinery is Premium Motor Spirit (petrol), compared to just 22% from the government’s refineries. He also revealed he once acquired the refineries in 2007 under former President Olusegun Obasanjo, but the deal was reversed by President Umaru Musa Yar’adua, who was advised the refineries could still function.
“Today, they’ve spent about $18 billion, and they are still not working. I doubt if they ever will,” Dangote stated.
He likened current rehabilitation efforts to modernizing a 40-year-old car, saying even if you replace the engine, the body is too outdated to meet modern demands.
His view aligns with that of former President Obasanjo, who last year claimed even global oil giants like Shell refused to run the refineries due to their condition. Obasanjo accused the NNPC of enabling corruption, saying the refineries became a feeding ground for waste and inefficiency.
Calls for the sale of the refineries have intensified, especially following the shutdown of the Port Harcourt refinery just six months after it was declared operational. The Warri refinery was also shut down a month after it supposedly came back online.
The Manufacturers Association of Nigeria and crude oil refiners have urged the Federal Government to sell off the facilities or scrap them entirely and channel funds into modular refineries instead.
In 2021 alone, over $2.8 billion was approved for the rehabilitation of the three refineries, including $1.4 billion for Port Harcourt, yet none is currently operational. An additional N100 billion was spent that year, with a monthly bill of N8.33 billion going into maintenance.
Efforts to get a response from the NNPC were unsuccessful, as official lines remained unreachable.
Should the government keep pumping money into these ageing refineries, or is it time to privatize them and move on?
