Dangote Refinery part 2

I was scared of the huge size of Dangote Refinery in the same way,I was scared of his previous monopolies in sugar, cement and even stranglehold of stock exchange at some point where Dangote cement strangulated the stock market to control about 60 percent of market capitalization.I also complained at my alma matter the ikotun newstand about the inferior quality of his products such as cement,pasta,indomie etcetera.I thought I was the only Nigerians seeing this threat to the extent of socio-economic stability and we hardly feel not a change in our blast of complacency and defiance of insensitive behavior.I came across the statement by the Farouk Ahmed president of midstream and downstream petroleum regulatory authority (MDPRA) as shown in the above pics that Dangote Refinery products are much inferior at 650ppm -1500ppm when compared to imported fuel and most fuels in west Africa and also complained the Dangote Refinery at 45percent completed not yet granted license like Walter Smith.They claim by December Nigeria would become the net exporter of Petroleum products with the commencement of operation at warri and Kaduna refineries with port harcourt coming on stream in August.He noted Dangote directed all petroleum importers and marketers to stop importing petroleum and report at Dangote Refinery for the products .They lamented against the fact that Dangote Refinery would soon become a monopoly  and they cannot allow monopoly to strangulate everybody.

Monopoly besides local authority NNPC had observe unless federal government was forced to call international oil companies to order the Dangote Refinery maybe forced to crash .While NUPRC according to MDPRA ready to allocate sufficient crude to the refinery the international oil companies (IOCs)are frustrating the effort of NUPRC and local refineries like Dangote Refinery and maybe forced to close shop.I think Dangote monopoly is far better than the strangulation of IOCs exporting wealth to their metropolis and draining the local economy.Any iota of truth that the refinery is not completed and it's crude or refined petroleum inferior?Is this not a campaign of calumny or not better than the historic judgement of the supreme court?

Lastly why do we have evil people in this country who doesn't want Dangote Refinery to work and save us from the brigandage of the West turning our economy into dumping ground of all sorts including substandard and bad fuel? Dangote Refinery was 87 ppm and would soon come down to 10 ppm making it the best products in the world and he delivered speech before house of representatives to debunk the lies by regulatory agencies which had no testing lab and still brandished fake testing certificate.He said the testing certificate was fake.He advised them to take from the filing stations and also his refinery products and test to be able to the one that is fake.The advise was followed and Dangote said before the house that they have seen the truth themselves that his refinery produced the best fuel in the country.

In the most powerful interview ever done by professional on this burning ational project the economist Emanuel Kelviñ spoke extensively on sundry issues including te recently conducted laboratory test.He noted the similar studies that were done on total energy downstream was 1,887 part per million(ppm) for imported diesel into Nigeria.

  He lamented he didn't receive a single incentives from government.Dangote was crying of high interest rate there was nothing tinubu say or could do about it.He says interest rate of 30percent would cripple the refinery and send him out of business.I don't blame them because Dangote too has a dirty past and they see it as payback time against him .Be that as it may why do we love white people more than our own?Why can we stop 60 years of economic slavery and let Dangote be?Can you imagine he doesn't even have a license after spending $20b.in refinery business? Federal government has reduced their investment from 20percent to 7.9percent because he hasn't finish the refinery and until finishes they won't take up the full slot.We are the major problem of ourselves and enemies of our progress and we re truly lazy which is why saboteurs could have a field day.

There is no doubt that Farouk and the ilks were the real saboteurs and I was like crying when I read what Dangote said about his detractors who called him monopolist.I saw the post in my Instagram page.Hear him:..... everything I do is in the best interest of my country I can't take any property or asset or refinery to the grave.Take a look at the potential of the refinery according to kelvin Emmanuel on The Morning Show at Arise TV  about 49.4million liters of PMS on a daily basis,26million litters of diesel on a daily basis,12 million liters of jet A 1 on a daily basis,1.1million litres of kerosene on a daily basis,2.1million litters of base oil used for production of lubricants on a daily basis,he lamented why didn't they show interest to supply Dangote Refinery with feedstock?"Why is the government not happy to supply Dangote with Feedstock?"

In reply to the journalist on seat on the possibility of threat against vested interest kelvin replied Dangote Refinery would wipe out the importation business and also begin with the issue of testing globally in the midstream sector in general from the American testing standard for materials,European standard EN228,ASTM,D4814,the American environmental protection test, colonial test, American petroleum standard test.These are various test that ask for the octane number,mode of octane number the distillation in terms of surphur content and density and the test done in the Dangote Refinery lab produced 87ppm for diesel .The test that was done for total energy 's downstream produced 1827ppm for imported diesel and amative energy produced above 2,254ppm and he said his diesel is way far better than the one imported into Nigeria.He suggested they should recruit XGS as the most reputable gasoline testing firm in the world including PWC and KPMG to conduct another certification process for AGO and gasoline in the country if they like for another round of test as third party round Robin test for these products.In 2022 NNPC did what they called reserve based lending with afroexim and set up SPV,Lekki refinery plc through which they borrowed a billion dollars and they staked the forced sale agreements that was generated to invest in Dangote Refinery."Now in the shell purchase agreement there was a specific timeline in which they were supposed to pay the balance of that 20percent with total valuation of $2.7billion stake in Dangote refinery oil company .Now that stake was precedent on the refinery kicking off"and now the refinery kicked off and the refinery badly needed feedstock to function and NNPC did not pay off their stake in form of feedstock that translate into more than 20million barrels of crude oil.The feedstock of $1.7billion in today's market translate into 20.7million barrels .Why are they not paying with that feedstock?You will be shocked by what he said and when he said between 2019 to 2024  NNPC has borrowed about 12 billion dollars at afroexim and they staked about 250million barrels of crude oil as collateral in reserve based lending for that loan,I was almost shedding tears.Yet reneged on simple $2.7billion worth of stake after wasting $12billion ?I don't get it something is wrong with Nigeria.The most recent was project gazet and was widely criticized when they exchange 55,000 bpd for $3.4b.at about 11.85% interest rate,6% sulphur  ,5.85% country risk premium and they happen to pay for 55,000 BPD at the  $57 per barrel and due to this entanglement it could not provide Dangote with Feedstock because it's being doing direct sales direct purchase where exchange crude oil for companies appointed by NNPCL in exchange for PMS before the refinery came up and  has sold the future generations and future of Nigeria gradually impounding the crude oil under our feet and majority hardly knows.They Ve been using these companies appointed by NNPCL including Duke oil now NNPC trading for a long time to do this dirty deals considering that PMS constitute 43% of derivative when you refine a barrel of crude oil.NNPC cannot pay feedstock to Dangote of $1.7billion  due to the fact under the domestic crude oil supply obligation agreement crude oil is actually allocated at a discount of shell price 27% on the open market rate.They failed totally to supply feedstock beyond six million barrels supplied because of this entanglement and the company has to scaled down 20percent to 7.9% equivalent to their cash holdings contributed.

The illegal refineries in the niger delta was highlighted as lacking adequate infrastructure and they lack chamber,they lack hydrotreater that can refine the product in line with international best practices into globally accepted standard and it created black sooth or contaminated environment and carcinogenic impacting the people's health and well-being.There is a lot of impurities in the air in the country with polluted environment compared to cleaner environment overseas.The level of high sulphur content and low octane in the hydrocarbon products of the fake imported products damaging engines and vehicles in the country speaks volumes of the failure of the bike regulator which doesn't even have its own testing lab and still shamefully could not keep quiet and at least suffocate his own ignorance.

The economist did not agree the international oil companies should be blamed but NNPC and should not be separated.

Babafemi ojudu in the media tour of the refinery with his team said the investment was massive and noted he was already taking crude from external parties from Angola,Brazil and America as he once proposed due to frustration in Nigeria.He said the complex had 50,000 rooms for staff and 350 bridges with thousand of cranes already producing jet A fuel for the airlines and exploring to America etcetera.

The claim of monopoly and fake products was bloated and the allegations were put to rest in Dangote lab the first of its kind in subsaharan Africa and had said before not even Saudi Aramco had such world class testing lab.

 

A HISTORIC JUDGEMENT.part three

However in the aftermath of the historic judgement there was panic in many states where a staggering 437 local government councils in 19 states risk zero allocation beginning from this month of July  following the imminent suspension of their monthly allocation and the threat of caretaker committees can generate.The growth of systemic uncertainty seemingly pervades these lawless states still enforcing the illegal use of caretaker committees and lack of democratically elected councils.Any council that fails to comply will have their funds confiscated.The 19 affected states and 437 local councils include 23 local governments in Rivers states;27 in jigawa;21 in Anambra;14 in zamfara;23 in Benue State;20 in Bauchi; 17 in Plateau states;Abia has 17 councils guilty in this context too;34 in Katsina;17 in Enugu;18 in Cross River;23 in Sokoto;44 in Kano;17 in yobe state;18 in ondo state;30 in Osun ;31 in Akwa ibom;Imo State and kwara state 27 and 16 respectively.Luckily for Delta currently operates with 25 locally elected councils might escape the hammer.

I ask again does it make sense for federal government to renege on its own verdict? It is somehow too early to pass verdict and let's wait till 2027

A HISTORIC JUDGEMENT.part 2

In the statement issued by national publicity secretary of APC Felix Morka on Friday that the judgement "gives practical expression to constitutional recognition of local government councils as the third tier of government.It constitutes the single most significant stride towards restructuring Nigeria since its return to civilian democratic rule in 1999.

However the nigerian union of local government employees and association of local governments of Nigeria have advised the Nigerian financial intelligence unit to help track council funds and prevent diversion of funds common during Obasanjo era.Currently federal government receives 52.68% states 26.72% and local governments get 20.60% of the monthly FAARC allocation being distributed under the presidency and federal account allocation committee.

In May the attorney general of the federation and the minister of justice filled a suit against the 36 states of the federation on behalf of federal government for full local government autonomy predicated on 27 grounds .The attorney generals of the 36 states too in reprisal retaliated with filed objection to the suit instituted against them.Hence the supreme court however in the historic the local government autonomy was non negotiable.

There were pockets of doubt here and there as one reads through the dailies and net .From the voice of caution beginning from the president of NULGE Akeem Mbali despite the good standing by the supreme court however cautioned against disobedience to the historic verdict.

The case of Saturday Tribune was particularly interesting in an essay by Abiodun Awolaja who threw the worst bombshell since the historic judgement was delivered.In the essay Nigeria 's LGs:From Confusion to more Confusion,a paragraph hit like atomic bomb reading the inferno minded essay."I have learnt to embrace methodological skepticism when I see the federal government which typically disobeys court orders lauding judgements in this manner"Then he cited the case of Obasanjo regime when they had full control of the money but did nothing and we recorded no concrete development.To add my viewpoint but under Babangida era the money went directly into local government accounts and we witnessed massive development at the grassroots especially the local roads.Anyway I was so sad when I came across a recent video on social media in which Governor Makinde heavily criticized federal government despite the landmark judgement had begun to renege on the implementation of the historic judgement.He disagreed sharing of money was our problem but rather generation of money.Does it make sense for federal government to renege on the judgement?It is too early to pass verdict till 2027.

A HISTORIC JUDGEMENT.part one

The landmark verdict by the supreme court of Nigeria which granted full financial autonomy to the often marginalised third tier arm of local government opens a revolutionary dawn in the annal of the nation 's checkered antecedence and revived optimism of renewed historical reconstruction.The blogger examines the current issues of local government autonomy and related issues.Enjoy the reading.

We the people of the federal republic of Nigeria moved closer to political freedom although which we should not exaggerate but certainly is a step in the right direction to guarantee the practice of nation building with this elusive form of freedom.Government is closer to the people than ever before when the apex court granted full autonomy to the 774 local governments in the country as stipulated in the 1999 constitution as amended.In the unanimous decision añchored by 7 man panel concurred it is illegal,unconventional and unconstitutional for governors to control in act of defiance funds meant for local councils in their official state accounts.They no longer have the legal backing,locus standi and convention to receive and retain funds allocated to local governments in the State coffers.

In the lead judgement by apex court delivered by Justice Emmanuel Agim declared government powers is divided into three arms federal state and local government,that the local government must be democratically elected and election of caretaker committee no longer applies and absolutely illegal.

The all progressives party (APC) welcomed the lead judgement on Thursday and heaved a sigh of relief that affirmed the right of the local governments to receive their monthly allocation from federation account.Moreso as they equally saluted president Bola Ahmed Tinubu for backing the historic judgement.

Dangote Refinery part one

At the African CEO Forum 2024 anchored by powerful journalist and the two speakers were álíkó Dangote and Patrick pouyuwane president of total energy gave eloquent speeches to captivate their crazy audience .Among the audience in the front row President Museveni of Uganda, President Paul Kagame of Rwanda and as the discussion progressed President William Tutor came in to the roaring applause of the waiting audience.

I was impressed with the two speakers and their gigantic projects in Africa but I was more impressed with Álíkó Dangote who spoke convincing about the projects especially the refinery project.He noted over the last two decades or so they invested $25b.in nigeria and $20b.of that figure was invested in refinery alone.The refinery has 650,000 BPD,over 500,000 metric tones of carbon black oil, 1million diesel in the first phase of refinery project and their production capacity for polypropylene and polyethylene can supply the whole of Africa and Africa will soon be self sufficient in gasoline,base oil and aviation fuel.In the project it has enough gasoline to supply west Africa,central Africa,east Africa and southern Africa.It has enough aviation fuel to give the entire Africa and also export some to latin America like Brazil and mexico.And it also doing base oil which is to do like engine oil,doing linear benzyl as raw materials to produce detergents . Nobody is producing that benzyl now in Africa to meet the demand of 1.4billion population and we know all our detergents especially the raw materials are imported and the forex waste will stop and Africa self-sufficient in this production.In the next four years Africa will not import any fertilizer again from anywhere and he said "you can challenge me"that in the next four years no importation of fertilizer.The audience agog with applause and clapping tirelessly as he says"We LL make Africa self sufficient in both potash, phosphate .....and our Urea 3million metric tons in the next 20 months" our Urea will be 6 million metric tons"which is entire capacity of Egypt."

However his greatest challenge in Africa was the inconveniences and inconsistencies in policy formulation.As he put it candidly ,when you have "a goalpost before you and you re a about to score the goal "and you re surprised to see and hear that the" goalpost has been changed".

Dangote speaking to the media in visit to the Dangote group he noted they splitted the company into two main traditional business and then oil and gas business from a trading and commodity based company that started in 1978 about 46 years ago and now attractive investment across Africa.It added flour, cement and sugar and through massive support from former president Obasanjo,commissioned the cement plant in 2007 .During the period the country was producing 1.8million metric tons of cement fought Benue government for four years to take over Gboko cement.Then got upset with low production output he launched 5million metric tons of cement production something unthinkable and unprecedented in subsaharan Africa at that point or "never heard off in SSA ". He frankly stated"Most of our bankers were scared and we went ahead with it and people didn't know what we went through.....".He also said at the time they were build obajana no bank had the capacity of 25billion naira and their capitals were so small they were scared to finance it.Infact they couldn't add many infrastructure like gas power,90km gas pipelines from Ajaokuta to the plant and eventually, he said they spent over a billion dollars on the project.They took the challenge and they built 5million metric tons of cement production capacity and was commissioned in the 12th of may 2007 about 17 days before Obasanjo left office.They had a loan of $500m.or $480m.from international finance corporation(IFC) with two moratorium and five years repayment contrary to Dangote request of three years to which they objective and offered 7years facility instead.They paid the loan back in 18months also wrote all banks their cheques paid them back too and they were granted 7years  backed up with their sense of humanistic proportion that they didn't want the group to default despite their skepticism on their forecast and numbers.In 2008 at a ceremony they actually commenced cement project of 1.9b.with GTB and other banks., Between 2007 and 2013 the group witnessed massive expansion and restructuring,set up boards,listed the cement on stock market, diversification into other sectors like fertilizer, agriculture,oil and gas, petrochemical,motor assembly and infrastructure,focus on governance issues invited external parties and expanded across Africa.Even from 2003 they Ve started diversification and consolidation.Frankly speaking according to Dangote himself in a media briefing,the group signed long agreement of this refinery on September 2013.The first loan for the refinery was $2.6billion and it went into escrow account at GTB and the banks had so much trust in Dangote group to the extent they didn't ask for landed properties or any land at the period.They was no refinery license even during the period and it dragged for sometime before they could get the license and finally though they did. However the biggest challenge was with Ogun State government and for three years and a half Dangote lamented they couldnt get access to Olokola plant and it cost them $500m.due to the fact that the money in escrow was not yielding yet interest rate pile and very useless Governor Dapo Abiodun squandered the destiny of Ogun State lost the opportunity to another state.When finally they got a land in Lagos where they were taken to Lekki free trade zone the government demanded they pay in dollars and they pay $100million for the land at free trade but later were taken to ibeju Lekki where they taught all lands were the same and little did they knew they were wrong.Infact it was a marshland and they had new soil testing and sand filling etcetera.He said they had critical issues in Lagos in general especially the community owners of the land had issues with Dangote and they included their justice and the likes of Justice Oguntade of the supreme court who was an indigene was also involved.They had challenge with the concerned community towards the end of Fashola's tenure into the middle of Governor Ambode's tenure.Thus the delay led to losses of $600m.interest rates increasing at the time even before they could start work on the procured land.

Now Dangote group as a successful conglomerate operates in ten countries and with new plants under construction in three other countries.From food business such as flour to sugar and it used to be no.2 in flour milling after nigeria flour Mills and decided to concentrate on Flour milling in which he believed you hardly add value bringing in wheat you process and you sell flour.He thought the group should grow wheat being very easy things to do but the conflict of vested interest was involved and the cabal that preferred wheat importation they decided to focus on sugar having  bought savanna sugar through privatisation program intended to expand savanna and it was not an exception because they had a lot of issues too with savanna. Dangote lamented the challenge they faced at the community level from those who instigated the community against and they burnt 40percent of their farmlands and they had to start all over again.When he says "We actually paid our dues", people thought he was joking and little wonder he was fond of saying our project and engagement is not "by tea party"only the rationalists could unravel what he meant by that language of introspection.

In the oil and gas subdivided into downstream upstream and midstream the group is well invested in midstream with the emergence of Dangote Refinery, including petrochemical,energy generation and upstream division has several blocks under the group 's control.The upstream production of subsea gas pipelines and it has block 71 and 72 and finally resolved the issue they have with partners like NNPC and issues like protection of hydrocarbon assets and from these blocks production will start taking the oil by August,2024 producing between 20,000 to 25,000 BPD.

However in agriculture too the group is changing the narrative,taking on rice,sugar cane and tomato.In tomato they re doing a fresh one and in rice out of 9million metric tons of rice we consume Dangote could produce a million metric tons of rice per annum which is 34 percent of total processing capacity nationwide.The revenue will grow 6 times over the next one year from $5.6billion in 2022 into $30billion in 2025 and somewhat have massive impact on naira appreciation. Dangote cement currently provide 75 percent of the group income as they seek to diversify revenue sources from other sectors.The growth in the generation of foreign exchange enhances and empowers the group from relying on central bank for foreign exchange Windows and self sufficient with war chest and supplying forex. About 80 percent of EBITDA is coming from Nigeria and 90 percent of total revenue will be in various local currencies and moving from the former EBITDA based in one currency considered too risky into the latter diversified in local currencies.What they did was to dollarise the revenue and cement business should now generate only 15 percent Instead of 75percent and 50 percent of EBITDA subsequently will come from outside the country including export and 70percent of the revenue will be in hard currency. 

Almost a billion dollars or $900 million to be precise was spent on agriculture and he was funny when he recalled the banter from a narrative when president of African development bank Adeshina came to him and said "my brother your hair has turned like a cotton" and he replied "my brother that's Nigeria for you."He embarked on massive agricultural investment with the purpose that in the next four years no ton of sugar will be imported again and will concentrate on value addition massively growing sugar cane with the aim of producing 750,000 metric tons of sugar locally.All Dangote rice mills will not be connected to national grid and will produce its own power beginning from production of green energy from rice husk.In other words it means they would be producing green energy from the shell of the rice and it speaks volume of massive scale of innovation going on moving away from being connected to national grid.The truth is rice business consume a lot of power and you re talking of processing,milling,parboiling etcetera.

In cement almost $2b.or $1.7b.so far invested in cement business and beside the problem with Ogun State ,they have gone back to site to start 6million metric tons of cement production capacity with the strategic intent to export surplus after satisfaction of domestic demand.

He believes you must produce enough for the domestic market and then export the surplus and that is in line with international best practices from Samsung in south Korea to manufacturer in Japan the same standard applies.

In fertilizer about $2.5billion was invested,$2.4b in cement compared to $19.4billion  in refinery business including other units of midstream and upstream another $1.1b. a total of $25.4b.over the last two decades .