Aliko Dangote, President of the Dangote Group, has called for an end to the practice of mortgaging Nigeria’s crude oil, warning of the long-term consequences for the nation’s economy.
Speaking at a summit organized by the Crude Oil Refinery Owners Association of Nigeria in Lagos, Dangote highlighted how other nations, like Norway, are investing their oil revenues into future funds, while Nigeria and other African countries are depleting their future oil proceeds.
He emphasized the importance of securing a steady supply of feedstock for local refineries by ending crude-for-loan agreements, which he described as mortgaging the country’s future.
“To ensure the availability of adequate feedstock, we must halt the practice of mortgaging crude oil. It’s unfortunate that while countries like Norway are investing oil revenues into wealth funds, we in Africa are spending future oil revenues today,” Dangote said.
Currently, the Nigerian National Petroleum Company Limited (NNPC) has committed to supplying 272,500 barrels of crude oil daily through various crude-for-loan agreements, totaling $8.86 billion. This means approximately 8.17 million barrels of crude oil will be allocated monthly for these deals, as analyzed by the Nigeria Extractive Industries Transparency Initiative and NNPC’s financial statements.
Represented by Group Executive Director Mansur Ahmed, Dangote stressed that Nigeria must prioritize its domestic crude supply obligations and expand crude production to meet local refinery demands. He also noted that the Dangote refinery, with a capacity of 650,000 barrels per day, was built without any government incentives.
However, Dangote advocated for the introduction of investor incentives to help transform Nigeria into a regional refining hub. He also pointed out that over the next three years, 1.8 million barrels of new refining capacity would be added globally, with refineries coming online in Kuwait, China, and Bahrain.
