Dangote Group President Aliko Dangote said at the weekend that
his company lost N50 billion to the flexible foreign exchange policy.
The Central Bank of Nigeria (CBN) last week
scrapped the dual exchange rate policy, creating a single window for the trade
in naira.
Dangote spoke when Vice President Yemi
Osinbajo toured the project sites of Dangote Fertiliser and Dangote Refinery in
Lekki, Lagos.
Dangote said the $161 million his companies
bought during that period from the CBN merely reflected the size of his
business and did not represent preferential treatment.
“We have been badly affected like any other
company,” he said, arguing that operational costs totalled $100 million each
month due to recurring expenses, such as the purchase of parts for cement
production and running a fleet of 9,000 trucks.
“When you are talking about 20 billion
dollars worth of projects, what is 161 million? One-hundred-and-sixty-one
million dollars is what I need in just six weeks,” he said.
“This week (last week), the Central Bank
removed the peg that has held the naira at the official rate of 197 for the
last 16 months, leading to a 30 per cent devaluation as the currency traded
freely on the interbank market.”
Dangote said the decline had pushed up
costs. “This devaluation alone, we have lost over 50 billion naira ($176
million),” he said.
“The gas, which is our main source of
power, is priced in dollars. If there is 40 per cent devaluation, your price
will go up by 40 per cent. Every single aspect of the production will go up by
that percentage,” he said.
To Osinbajo, the Dangote Fertiliser and
Petrochemical projects are capable of assisting in the government’s drive to
reduce poverty through generation of foreign exchange.
He said it was also in line with the
Federal Government’s immediate objective of diversifying the economic base of
the country as a result of the plummeting of the price of oil, the country’s
sole foreign exchange earner.
Osinbajo was accompanied during the working
visit to the Dangote Refinery, Petrochemicals and fertilisers, reputed to be
the biggest in Africa when completed, by Lagos State Governor Akinwunmi Ambode,
Ministers of Finance (Mrs Kemi Adeosun); Power, Works and Housing (Babatunde
Fashola); Solid Minerals Development (Kayode Fayemi) and others. He was amazed
at the size of the projects and reiterated the government’s preparedness to
provide an enabling environment for businesses to thrive.
Dangote said the diversification of
Nigeria’s economy was long overdue and that one sector that the government can
focuses on is agriculture.
He said his investment in fertilizer
production was a sure way the diversification into agriculture could succeed
because according to him, it will amount to little if focus is directed to
agriculture and fertilisers would be imported.
“By the time we complete this project,
there will be opportunity to take on agriculture and say bye to poverty,
because there will be jobs, no sector has more job potential than agriculture,”
Dangote added.
Dangote told the Vice-President that the
$12 billion refinery would have a capacity of 650,000 barrels a day. According
to him, there will be market for the refined products because only three
African countries – South Africa, Egypt and Cote D Ivoire – have functioning
refineries.
On the project, he said: “Mechanical
completion will be end of 2018 but we will start producing in 2019.”
The refinery, petrochemicals and fertiliser
in one spot according to Dangote, is the single largest stream in the world.
“This site is the biggest site in the
world, the refinery is the biggest single refinery in the world, the
petrochemicals is 13 times bigger than Eleme petrochemicals while the
fertiliser plant will be 10 times bigger than former National Fertiliser
company. The project, with the $2 billion fertiliser unit was the funded
through loans, export credit agencies and our own equity,” Dangote said.
Money man
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