This is a big revelation in the Nigerian business climate. Yes, the Nigerian government through NNPC, the national oil corporation, is planning to acquire 20% of equity in Dangote Refinery: “I can tell you today that we are seeking to have a 20 per cent minority stake in Dangote Refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery.” So, magically, the Nigerian people have essentially solved any risk within Dangote Refinery as the world begins to move post-hydrocarbons. Depending on valuation, who knows, the company can even make “profit” before the first day of refining crude.
What do I mean? If Dangote Refinery invested $10 billion in that refinery, and now values the business at $50 billion and Nigeria takes 20% stake, it simply means that Dangote Refinery has recovered the $10 billion. Magically, it does not need to spend years paying back debtors, etc, as it can return the money immediately!
NNPC Chief Operating Officer, Refining and Petrochemicals, Mr Mustapha Yakubu, at the virtual event, stated that one of its divisions, the Greenfield Refining Projects Division (GRPD) was handling the negotiations with Dangote Refinery.
He said: “We have what we call the Greenfield refinery and the Greenfield Refining Projects Division (GRPD) of the NNPC. What we do, our strategy is to collaborate and seek strategic partnerships with private investors.
At the moment, we have Dangote Refinery, which is the 650,000 barrels per day capacity, plus a mini 80,000 tonnes per annum petrochemical plant.
What are we doing there? I can tell you today that we are seeking to have a 20 per cent minority stake in Dangote Refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery.
That’s 650,000 barrels, going into a single crude distillation unit (CDU). When that comes on board, it will also wet the nation for us.”
But how would Nigeria get the money to pay the refiner? We have a new revenue source called Recovered Loot: “The Minister of Finance and National Planning, Zainab Ahmed has revealed that the government has been borrowing from recovered loots to fund the budget. The minister also revealed that the government has not been able to repay back the loans taken so far. She revealed this while appearing before the House of Representatives committee investigation recovered loots on Thursday.”
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Because more recovered loots are coming back, we are sure that resources would be available to buy this 20% stake, even as Nigeria continues to look for funds to fix its own refineries! What a country!
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The Fulani guys controlling the Federal Government really want to finish off Nigeria in a record time, and they are going full throttle. We need to identify happenings in the land and call them by their names, because insulting people’s intelligence has become normal in the land.
What engenders seeking of equity in a private establishment? Of course profitability! So, what financial modelling has been carried out which proved that Nigeria would earn billions of dollars in dividends in few years from the refinery? How will owning a stake bring down the price of petrol without incurring losses? Dangote and his associates borrowed money to build a refinery, and before the refinery could even commence operation, some Fulani guys have hatched plan to absorb it from any risk, christened as 20% stake, and they are brazenly announcing it?
How much did we invest in Glo, Innoson, Airpeace, etc?
If we still have any decent creature in the national assembly, this is one piece of transaction they must block, until the clowns at NNPC can prove how profitable this misadventure is. The same NNPC that doesn’t know how to run anything profitably is talking about investment in refinery, how about the $1.5 billion?
Certified thieves everywhere.
Francis Oguaju, there is no need to trivialize stupidity. This is not about Fulani, Igbo, Hausa, Yoruba, etc. Calling names may not help. The key thing is getting better people to run Nigeria.
But Prof, when people complain about Dangote, you have taught us for years that when we solve government pain points at scale and acquire scale in operation, we get subsidized by government.
How is this different from what has been happening?
That validates my thesis. That I wrote about it does not mean that I support it. This supports my thesis on conglomerate tax and how they tax citizens and nations. https://www.tekedia.com/dangote-book/
The right question should be – is it wrong for government to have equity in private enterprise ? If the answer is Yes, then we should lobby our representatives who sit in petroleum committees of the 2 houses to reject . If the answer is a No, then we should push the same committees to ensure valuation is right . It should not be about love or hatred for Mr Aliko Dangote but what will help drive Nigeria to where it should be as l understand Ghanaians are already wishing to have a Dangote .
This is another robbing Peter to pay Paul. Nigeria and Hausa/Fulani politics has always been to rob somebody to help another person. I don’t like Dangote Brand and his business style. This guy does not like true competition if he has his way. He want to own Nigeria as a business entity.
Nonsense
It is business, no hard feeling sir. Follow the tech news you would see ridiculous M&A, why, simply, men want to die in dominace. Who cares, start you own.
By the way, the government should be faulted, if you go hard in regulation of one sectorn, then do it for all. Anti trust is serious in the west in all sector.
So, to expect a man see weak link turn a blind to it- Sorry, you don’t understand the dynamics of human nature and mechanics of pricipal capitalism.
How about reviving our refineries instead of investing in dangote refineries? Does it mean that there’s no hope of bringing our refineries back to life?
This is just a clearification that the rise of a region is a mix of public private partnership. However not the way it practised here- this is wickedness