Nigeria’s weak manufacturing sector is one of the key factors contributing to the shortage of foreign exchange in the country, according to a recent report by the Nigerian Economic Group (NESG).
The report, titled “Nigeria in 2023: Bridging the productivity gap and building economic resilience,” was authored by Dr Wilson Erumebor, the NESG Senior Economist, and published by Foresights Africa.
The report noted that the Nigerian economy has faced significant challenges in the past seven years, with two economic recessions and a shift of economic activity towards agriculture, and a slowdown of the manufacturing sector.
The manufacturing sector’s neglect has resulted in a shortage of foreign exchange, limited job opportunities, and an import bill that surpasses current export earnings.
Furthermore, the report highlighted that the unemployment and underemployment rates in Nigeria reached an all-time high of 56.1 percent in 2020, with 90 percent of workers employed in low-productivity sectors, such as agriculture and non-tradable services.
To address this, the incoming administration must work with stakeholders to develop an agenda for economic and social inclusion, which must include a practical strategy for structurally transforming the economy by moving labor and economic resources from low-productivity to high-productivity sectors.
Dr. Erumebor emphasized the importance of manufacturing, which sits at the middle of the productivity ladder. He suggested that the sector has a much higher productivity level than agriculture and can accommodate a large number of the labor force in the country. Additionally, Nigeria’s projected rising population, mineral resources, and adoption of a single market in Africa, such as the African Continental Free Trade Area (AfCFTA), present an opportunity for the manufacturing industry to thrive.
However, Dr. Erumebor pointed out that inadequate power supply and the burgeoning infrastructure deficit hinder the competitiveness of the manufacturing sector.
He called for the incoming government to address these issues and develop an industrial policy that supports the scale, efficiency, and competitiveness of local firms within the manufacturing sector. Such policies must be integrated with Nigeria’s AfCFTA strategy and support the transition of small-scale firms that are often the drivers of job creation in the country.
Dangote Petroleum Refinery Set to Make History with Public Listing on NGX
Aliko Dangote, the president and chief executive of Dangote Industries Limited, has announced plans to publicly list the subsidiary, Dangote Petroleum Refinery, on the Nigerian Exchange Limited (NGX).
Dangote expressed confidence in overcoming previous challenges related to crude oil supply, stating, “We have resolved all the issues with crude oil supply. We are now ready to move forward with our plans to list the refinery on the Nigerian Exchange Limited.”
The refinery, poised to commence operations in December, holds the promise of significant contributions to the Nigerian economy.
At full capacity, it is expected to produce 650,000 barrels of oil per day, with an initial rollout of 540,000 barrels daily.
The facility will produce 27 million liters of diesel, 11 million liters of kerosene, and nine million liters of jet fuel, sourcing crude from various Nigerian producers, including the state oil company.
A finalized deal for the delivery of the first cargo of approximately six million barrels next month signals the imminent realization of this ambitious project.
The refinery’s impact is anticipated to extend beyond the oil and gas sector, with projections suggesting significant cost savings for Nigeria by eliminating the need to import petrol.
Industry operators and government officials are optimistic about the transformative potential of the Dangote Refinery.
Akinwumi Adesina, President of the African Development Bank (AfDB), lauded the project as the best-industrialized initiative for Africa, projecting substantial savings for Nigeria and the continent as a whole.
As Nigeria’s largest refinery project, the facility has garnered praise from the Lagos Chamber of Commerce and Industry (LCCI).
Dr. Chinyere Almona, the LCCI Director-General, commended the visionary efforts of Aliko Dangote and the supportive federal government, emphasizing the refinery’s capacity to meet Nigeria’s refined petroleum product needs.
The impending listing on the NGX positions Dangote Petroleum Refinery as a catalyst for economic growth, energy security, and self-sufficiency in Nigeria and beyond.
Aliko Dangote: Dangote Refinery Set to Commence Operations, Eyes 350,000 Barrels Daily
In a recent interview with the Financial Times, Aliko Dangote, the President and CEO of the Dangote Group, announced that the long-anticipated $20 billion Dangote Refinery in Lekki, Lagos, is set to commence operations by refining 350,000 barrels per day.
Dangote revealed that a deal had been secured for the delivery of the first cargo of approximately 6 million barrels in December 2023.
He expressed confidence that the refinery could achieve its full capacity of 650,000 barrels per day by the end of 2024.
The Dangote Refinery, touted as the world’s largest “single train” facility with a singular distillation unit, is expected to significantly reduce Nigeria’s dependence on imported fuel and save billions in foreign exchange.
Dangote lamented the irony that Nigeria, a major oil producer for over 50 years, has struggled to refine its own crude adequately.
However, the project, which has faced delays and exceeded its budget by about $8 billion, has not been without challenges.
Dangote dismissed doubts about the refinery’s efficiency, stating that the challenges encountered during the project could have jeopardized his business empire.
He acknowledged being under intense pressure, facing allegations of underhand business practices and gaining unfair access to foreign exchange, which he vehemently denied.
Despite these challenges, Dangote expressed gratitude for overcoming the hurdles and reaching the destination.
The refinery is expected to generate substantial revenue, and plans are underway to eventually list it as a separate company on the Lagos stock exchange.
Dangote Cement Advocates for Sustainable Cement Production Amid Rising Carbon Emissions
In a bid to address the escalating global concerns over carbon emissions, Arvind Pathak, the Group Managing Director of Dangote Cement Plc, highlighted the cement industry’s pivotal role in contributing to seven per cent of worldwide carbon emissions.
Speaking at the 12th Africa Cement Trade Summit in Abidjan, Cote d’Ivoire, Pathak emphasized the necessity for the industry to adopt sustainable practices.
Pathak acknowledged the energy-intensive nature of cement production, outlining the emissions generated throughout the value chain, from raw materials’ processing to the final product’s dispatch.
Dangote Cement, a significant player in the industry, has committed to decreasing carbon emissions through a strategic fuel substitution approach.
Pathak, represented by the Group’s Head of Sustainability, Dr Igazeuma Okoroba, advocated for the use of alternative fuels, such as municipal, agricultural, and industrial wastes, to reduce emissions.
He emphasized that these alternative fuels emit less CO2 when combusted, contributing to a more sustainable and environmentally friendly cement production process.
Despite the challenges posed by global climate shocks, Pathak stressed that decarbonization is not merely an option but a necessary strategy for future-proofing businesses.
Dangote Cement, as a pioneer in decreasing CO2 emissions, has leveraged sustainability reporting and received positive ratings for its climate change initiatives.
The adoption of alternative fuels aligns with the broader goal of addressing climate change concerns and reducing the cement industry’s environmental impact.
Pathak highlighted the need for clear and detailed decarbonization targets, emphasizing that companies must adapt to a rapidly changing world by embracing sustainable practices.
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