Africa’s Richest Man, Aliko Dangote’s revelation that he paid a whopping $100 million to the Lagos state government, for the acquisition of the land where he built his Petrochemical Refinery in Lagos has sparked more controversies surrounding the refinery.
The Refinery built In Epe, covering 2,635 hectares of land and adjudged one of the biggest in the world, has recently been hit with serious controversies, including the suggestions that some vested interests in the country, are trying to destroy Dangote’s biggest business ever.
Speaking to some journalists recently, Dangote opened what some analysts have described as a can of worms since the refinery first started construction in 2014.
His claim that he payed a whopping $100 million to the Lagos state government, according to analysts is a watershed in the controversy sorounding one of the largest downstream oil investments in the world.
“In the refinery, we did not, and I repeat, we did not collect one single incentive from the Federal Government of Nigeria or even Lagos State. Yes, the Lagos State gave us a good deal but we paid $100m for the land. It wasn’t a free land; we paid for it,” the business mogul said.
The state government has always given the impression that the huge piece of land was allocated to the company free of charge.
Recall that the refinery was to be cited in neighbouring Ogun state, but the state government could not reach a favourable deal with Dangote.
The bribe for land is however coming on the heels of the eyes of the storm that Dangote has now found himself in view of what many consider wea “system attack’ against him, particularly the refinery which happened to be the biggest in his investment so far, apart from the cement sector where he’s a big player.
Following a long delay, the cement mogul has announced that the company will beging to roll out PMS from August, promising to end importation of the product and other allied products such as diesel, jet fuel, fertilizer amongst others, a development many say will finally put an end to the perennial sufferings of Nigerians who had had to rely on import for so many years.
The question is why Dangote has now been caught in the web of serious controversies, and in collision with the same government that had earlier supported him to build the refinery which cost him close to $20 billion.
The magazine learned that trouble started for Dangote after Bola Ahmed Tinubu came to power last year.
The immediate past governments of Goodluck Jonathan and Muhammadu Buhari supported the project since it took of in 2014 by providing support, including directing contiguous government agencies to work to ensure that the project became a reality.
The Buhari’s government had capped it’s support for the refinery by commissioning it before the former president left power on May 29 last year.
However, things started to go bad for Dangote after Tinubu swept to power, and suggestions aggravated that Dangote is not in his good books.
The feelers that the company is no longer enjoying government support started two months ago after Dangote accused the Nigerian National Petroleum Company, Limited, NNPPL, of not supplying the company crude oil which represents the major feed stock for production.
Recall that Dangote entered an agreement with the NNPLC for the supply of crude oil worth over $1.7 billion dollar, as part of the $2. 76 billion share purchase deal NNPCL had with Dangote to own over 20 percent stake in the firm.
But things has fallen apart as the NNPLC has now dumped the deal after failing to supply crude worth the equivalent amount to Dangote, a move many said has been sanction from the ‘top’, to send a strong message that Tinubu has no plan to support the company like his predecessors.
According to recent revelation, NNPCL now has 7. 2 percent share in the refinery following its failure to fully consumate the deal, thus rattling Dangote, who in most cases has depended on the Nigerian government to survive.
Speaking last week, Dangote explained what has now become a deal gone sour between the company and NNPCL.
“NNPC no longer owns a 20 per cent stake in the Dangote refinery. They were met to pay their balance in June, but have yet to fulfil the obligations. Now, they only own a 7.2% stake in the refinery,” he told journalists in Lagos.
The richest man in Africa has further angered the powers that be in Abuja after he tried to weave a web of conspiracies around the many uphills that the refinery is currently facing, after accusing International oil Companies, IOCs, of refusal to sell crude to the company.
They want the refinery to fail, Dangote screamed, though the allegation has been rebuffed by the IOCs which said the businessman has refused to compete in the open market, like others, saying oil business is an international one where every player must play by the rules.
According to those with this line of thought, crude oil business is not like the local “cement business” where Dangote has enjoyed government’s support for years, giving him undue edge over other players in the industry.
The government’s agency incharge of regulating oil business, the Nigerian Midstream and Downstream Petroleum Authority, NMDPA, had this week echoed the message that Dangote was trying to force a monopoly on the country through the Dangote Refinery. This will not be allowed, the agency said in what has been widely criticized by not a few Nigerians, who said the agency was trying to demarket Dangote.
The chief executive of the agency, Farouk Ahmed, who accused the company of producing substandard products against global standard, adding that this is one of the reasons why the Dangote Refinery has not been “licensed’ by the federal government, describing as a ruse, the allegation that some vested interest in the government are trying to destroy oil Dangote’s business.
The agency also said it declined Dangote’s request that other marketers be denied licence by the agency to import fuel into the country, in other to make the firm the sole producer in the sector.
Ahmed said, “The claim by some media houses that there were steps to scuttle the Dangote refinery is not so. The Dangote refinery is still in the pre-commissioning stage. It has not been licensed yet; we haven’t licensed them yet.
“They are still in the pre-commissioning. I think they have about 45 per cent completion,The NMDPRA boss warned that Nigeria cannot rely heavily on the Dangote refinery for its fuel supply.
“We cannot rely heavily on one refinery to feed the nation, because Dangote is requesting that we should suspend or stop importation of all petroleum products, especially AGO and direct all marketers to the refinery, that is not good for the nation in terms of energy security. And that is not good for the market, because of monopoly.”
Ahmed alleged that the quality of fuel from Dangote is below world standard. According to him, “So, in terms of quality, currently the AGO quality in terms of sulphur is the lowest as far as the West African requirement of 50 ppm is concerned.
“Dangote refinery and some modular refineries, like Waltersmith refinery and Aradel refinery, are producing between 650 to 1,200ppm. So, in terms of quality, their product is much more inferior to the imported quality.”
Dangote has since debunked the allegations, and keen experts in the sector have also adjudge NMDPRA claim to be false.
An economist Kelvin Emmanuel Co-founder and CEO of Dairy Hills, said officials from the agency has inspected Dangote Refinery and certified it okay for production, wondering why the agency is now demarketing the company.
For instance, Emmanuel said Dangote refinery “diesel is well well better than what is imported into the country” in terms of quality.
He said “After 6 months of testing wet production, they issue them a provisional acceptance certificate for a license to operate. After 12 months, they issue them a final acceptance certificate for license to operate — that test is currently nearing 180 days for PAC,” Emmanuel said.
Adding that, “Wet production test for pre-commissioning doesn’t mean the refinery is not already in production, it means the refinery is not yet functioning at full capacity utilization yet.
“The very fact that the condensation distillation unit has not fully gone into effect is the reason his diesel is currently producing 150-200 parts per million in terms of sulphur content—that will drop to below 50 ppm when all the centrifuges come into operation. It’s utterly disappointing that the NMDPRA chief in trying to sell a narrative, will attempt to de-market the refinery and mislead the public.”
Dangote has also debunked the agency’s allegation, calling for a thorough investigation of the NMDPRA claim, alleging that the agency does not have a laboratory to test petroleum products that are imported into the country to test their quality.
He said the regulator is only trying to encourage importation of petroleum products into t the country with a view to killing his refinery.
“I want to plead with the regulator to come, whether Sunday or Monday and I can guarantee you that before they come here it will be even below 10ppm,” he said.
“The most important thing is to note that the imported ones they are encouraging, is the spec in the test, but in certain cases when you check, different results will show. This is because those people who have the lab have been told what to write,” he added.
Amidst the counter allegations by Dangote and the government, not a few Nigerians are suggesting that there’s more than meet the eye in the whole issue.
For instance, experts in the sector are asking why the government would want to destroy the opportunity presented by Dangote Refinery, for the country to become an exporter of petroleum products, with the capacity to earn foreign exchange for the country.
The company has the capacity to earn the country more than $20 billion annually in foreign exchange, which the country needs badly due to the current scarcity in forex, experts say.
Other salient posers include why the once rosy relationship between Dangote and the federal government has suddenly become sour, and the contributions by the President Tinubu’s Presidency to all of the these.
The Presidency has yet to speak directly on the raging issue, but not few suggest that some persons in authority may have a hand in what is currently going on.
Watchers of events, therefore, insist that the fact that Dangote has chosen to speak publicly on the issue, rather than engage directly with the President indicate that he sensed that some people powerful forces in government are not happy with him, and had decided to take a pound of flesh against his business.
“Dangote has been attacking the federal government lately, which he hardly did in the past. What do you think is responsible, after all he’s a member of the President’s Economic Team, which gives him an access to Tinubu. But the fact that he has chosen to become the Bull in the China shop points to one thing, he craves for public sympathy against the government which obviously is poised to teach him a big lesson,” a source privy with the issue told the magazine on Sunday.
Recall that Dangote has raised some eye brows recently after he openly criticised some economic policies of the Tinubu administration. Top of his criticism is the Central Bank of Nigeria, CBN, which he criticised for hiking the interest rate to over 30 percent.
The magazine also reported that the mogul had earlier criticised the administration for devaluing the naira, describing it as the ‘biggest mess’ that has brought down the economy.
“The biggest mess created (by the government) was the devaluation of the naira from N460 to N1,400,” Dangote said.
Indeed, Dangote unwittingly put himself in the firing line of the Tinubu’s administration as a result of a slew of factors, including that Africa’s Richest Man failed to back Tinubu’s presidential bid last year, those familiar with the ongoing dog fight told the magazine.
Meanwhile, Heineken Lokpobiri, The Minister of State for Petroleum on Monday, met with Dangote and officials of the NNPCL and NMDPRA with a view to reaching a truce among the warring parties. It remains to be seen how far this can go to helping Dangote, as he navigates the current official conspiracies against him.
