Health crises are not new in Africa. The continent has grappled with infectious diseases on all levels, from local (such as malaria) to regional (Ebola) to global (COVID-19). The region has often carried a disproportionately high burden of global infectious outbreaks.
How cities are planned is critical for managing infectious diseases. Historically, many urban planning innovations emerged in response to health crises. The global cholera epidemic in the 1800s led to improved urban sanitation systems. Respiratory infections in overcrowded slums in Europe inspired modern housing regulations during the industrial era.
Urban planning in Africa during colonisation followed a similar pattern. In Anglophone Africa, cholera and bubonic plague outbreaks in Nairobi (Kenya) and Lagos (Nigeria) led to new urban planning strategies. These included slum clearance and urban infrastructure upgrades. Urban planning in French colonial Africa similarly focused on health and hygiene issues, but also safety and security.
Unfortunately regional experiences with cholera, malaria and even Ebola in African cities provide little evidence that they have triggered a new urban planning ethic that prioritises infectious outbreaks.
References are often made to historical successes of urban planning in Africa. But colonial use of planning for cultural and structural isolation, as well as for socio-economic and spatial segregation, limited its capacity to respond to health emergencies. With the widespread nature of COVID-19, is it reasonable to argue that it could possibly be the pandemic that inspires a new way of “doing” urban planning in Africa?
Our recent research paper discusses three areas that can transform urban planning in the continent to prepare for future infectious outbreaks, using lessons from COVID-19.
Integrating the informal
The first relates to the integration of the city’s informal sector into the formal planning process. This is reflected in two ways. The first is the non-inclusion of informal settlements (mostly slums) in urban planning practice. The second is the lack of planning focus on the informal economy that results in exclusion. Yet this is a sector that constitutes more than 80% of Africa’s urban economy.
In a time of COVID-19, slums and informality are critical due to the sector’s vulnerability to transmission. It is challenging to deploy testing and contact tracing , as well as adhering to social distancing rules. Many slum residents in African cities lack access to basic essential services such as water, sanitation, housing and healthcare.
And, given that the informal sector is characterised by unregulated economic activities including uncontrolled hawking and unplanned open markets, overcrowding is impeding social and physical distancing rules in African cities.
Change is needed. Perhaps COVID-19 will be the wake-up call to spur the consolidation of existing and formal structures to becoming more responsive to managing health crises in slums and the informal sector.
Geographic and economic imbalances
Second, there are geographical and economic imbalances in urban planning in Africa. Investment patterns and development mostly focus on the major cities with limited focus on its adjoining districts and regions. Yet what happens in cities does not stay in cities.
Infectious diseases often have cascading effects on adjoining districts and regions with functional relationships to major cities. COVID-19 has affected both cities and their adjoining regions. However, adjoining districts continue to receive limited investment in critical infrastructures such as health, housing and other essential social services.
Given the disruptions to the supply chain between major cities and the adjoining districts due to the pandemic, it’s about time that planning practitioners and educators learn to prioritise urban planning to reflect these imbalances. A poorly managed relationship between cities and adjoining regions can create inequality that may lead to unhealthy city-regional inter-dependencies, environmental damage and unmanaged waves of health crises. These can have ripple effects across the urban-rural spectrum.
Planning in Africa should ensure city-regions are more resilient by addressing imbalances to produce a more integrated city-regional planning around health, economies, transport networks and food production.
Third, public health matters should be considered in urban planning. Health outcomes traditionally do not drive urban planning practice in Africa. In our study, urban green spaces are used as an example because the COVID-19 pandemic has highlighted their importance in managing emergencies. Literature evidence suggests that African cities are rapidly losing their green spaces. This is due to, among other things, poor urban planning.
A new approach should bring open spaces into the heart of how African cities are planned, and management systems for local green space must improve. Integrating larger open spaces within the urban fabric allows cities to implement emergency services and evacuation protocols during health crises.
What frequently seems to be effective in advancing responses to health crises is an urban planning approach that integrates a range of infrastructure. This includes grey (such as treatment facilities and sewers), green (trees, lawns and parks) and blue (wetlands, rivers and flood plains) systems.
Although COVID-19 has profoundly transformed urban life globally, this article provides cautious optimism of its potential in managing future health crises in Africa. Going forward, urban planning in Africa needs to reflect the aspirations of urban residents and address multiple spatial inequalities, including access to better spaces in times of a pandemic.
Patrick Brandful Cobbinah, Lecturer, University of Melbourne; Ellis Adjei Adams, Assistant professor, University of Notre Dame, and Michael Odei Erdiaw-Kwasie, Research fellow, University of Southern Queensland
Facebook announced it will be opening an office in Lagos, Nigeria - its second office on the African continent.
Aimed at supporting the entire Sub-Saharan Africa region, the office is expected to become operational in H2 2021 and will be the first on the continent to house a team of expert engineers building for the future of Africa and beyond.
Facebook’s office will be home to various teams servicing the continent from across the business, including Sales, Partnerships, Policy, Communications as well as Engineers.
Commenting, Ime Archibong, Facebook's Head of New Product Experimentation said: “The opening of our new office in Lagos, Nigeria presents new and exciting opportunities in digital innovations to be developed from the continent and taken to the rest of the world. All across Africa we’re seeing immense talent in the tech ecosystem, and I’m proud that with the upcoming opening of our new office, we’ll be building products for the future of Africa, and the rest of the world, with Africans at the helm. We look forward to contributing further to the African tech ecosystem.”
The investment of the new Facebook office follows the 2018 opening of NG_Hub, its first flagship community hub space in Africa in partnership with CcHub, and the 2019 opening of a Small Business Group (SBG) Operations Centre in Lagos, in partnership with Teleperformance. Providing outsourced support to all English-speaking advertisers across Sub-Saharan Africa, the SBG office supports Small Medium Businesses (SMBs) through its Advocacy, Community & Education (ACE) programme, as well as its Marketing Expert sales programmes – all aimed at enabling SMBs to accelerate the growth and development of their businesses.
“Our new office in Nigeria presents an important milestone which further reinforces our ongoing commitment to the region”, commented Kojo Boakye, Facebook’s Director of Public Policy, Africa. “Our mission in Africa is no different to elsewhere in the world - to build community and bring the world closer together, and I’m excited about the possibilities that this will create, not just in Nigeria, but across Africa.”
Since the opening of its first office in 2015, Facebook has made a number of investments across the continent, aimed at supporting and growing the tech ecosystem, expanding and providing reliable connectivity infrastructures and helping businesses to grow locally, regionally and globally. This includes the recent rollout of its SMB Grants programme in Nigeria and South Africa, aimed at supporting over 900 businesses by providing a combination of cash and ad credits to help small businesses as they rebuild from COVID. The development of 2Africa, the world’s largest subsea cable project that will deliver much needed internet capacity and reliability across large parts of Africa, as well as its ongoing training programmes across the continent which support various communities including students, SMBs, digital creatives, female entrepreneurs, start-up’s and developers.
Nunu Ntshingila, Regional Director, Facebook Africa,said: “We’re delighted to be announcing our new office in Nigeria. Five years on from opening our first office on the continent in Johannesburg, South Africa, we’re continuing to invest in and support local talent, as well as the various communities that use our platforms. The office in Lagos will also be key in helping to expand how we service our clients across the continent.”
Covered in glass, the former IMB Plaza building in Lagos stood as an example of the influence of international design styles on the Nigerian commercial capital’s architecture.
Such “internationally” styled high-rise buildings, often seen as a symbol of progress and economic advancement, are not always well integrated into the local climate or landscape. In the case of Lagos, the climate is hot and humid, yet buildings like this are hermetically sealed, enclosed in glass, with limited shading from the sun and high reliance on artificial ventilation.
Similar imported architectural features are evident in other high-rise buildings across Lagos such as the WEMA Tower, Stallion Tower and Sapetro Tower. It is a trend in other African cities too.
The lack of connection with local context often has significant energy, environmental and social implications.
Such designs are driven by imitation, which limits social, cultural and conceptual diversity. Imitation in architecture – or “duplitecture” – also goes against the United Nation’s Agenda 2030, which seeks to make cities inclusive, safe, resilient and sustainable. To achieve this vision in developing African countries, it may be necessary to revisit current approaches to the built environment.
The culture of using foreign architectural styles, regardless of the consequences, comes from the pressures of globalisation and the colonial past of some African countries. But our research supports the view that buildings that are more linked to their local environment, climate and culture will be more sustainable for developing African cities.
Typical imported design
Through simulations and case studies, our research work on sustainable thermal comfort in Lagos architecture investigated typical “imported” building styles alongside vernacular styles. We wanted to understand the implications of these styles for the Lagos climate and context.
We compared typical hermetically sealed high-rise building forms with forms that emerged in the tropical climate. Results showed significant solar heating and cooling energy implications for imported high-rises.
Not only is it costly to cool these buildings, imitation also means that the cultural identities embedded in the fast disappearing vernacular architecture are lost.
International styles disregard socio-cultural aspects including clothing styles, diet and work patterns.
While the adoption of some architectural design approaches from other contexts into Lagos may have been beneficial, their poor translation and adaptation sometimes reflects dogmatism. This creates long-lasting challenges for sustainable development.
Buildings that are mostly covered in glass are imported into hot and humid tropical climates even though glass makes the interior very hot and expensive to cool with air-conditioning.
The interior temperatures of these buildings are often controlled by air-conditioning units which expel the heat back into the street. Daylight is also cut off by window blinds and so artificial lighting is needed.
The cooling requirements are even greater when workers dress in “international style” business outfits. All these elements create a system that is both ecologically and economically unsustainable.
Comparing two buildings
As part of our research, we compared two buildings that share similar design features but are in very different geographical contexts. The Palace of Peace and Reconciliation in Astana, Kazakhstan shares similar glazing features with the former IMB building in Lagos, Nigeria.
Astana is located at 51°N, 71°E. The coldest month (January) has an average high temperature of -9.9°C and average low of -18.3°C. Lagos, Nigeria is at 6°5N, 3°3E. July and August are the coldest months with an average high temperature of 28.1°C and low of 21.7°C.
The IMB plaza was headquarters of the International Merchant Bank before changes in ownership. It is in the financial hub of Lagos and is still used mostly for commercial offices. Hence the way staff dress.
Our solar analysis model revealed a high solar incidence (meaning more sun and heat concentration on the building) and cooling load. Though the building is currently being remodelled, the study showed the environmental impact of duplitecture in a city like Lagos.
Lagos is one of the coastal cities at risk of global temperature increases and rising sea levels.
What to do
Sustainability in developing African cities requires closer attention to organic and vernacular models. The “termite mound”-inspired Eastgate Centre in Harare, Zimbabwe is an example of sustainable architecture, inspired by a biomimetic model.
The building mimics organic systems to achieve a comfortable temperature, saving energy and making little environmental impact. The design reflects termites (Macrotermes michaelseni) working together to regulate temperature.
The termites achieve this by closing and opening holes of different sizes and at different locations and heights on their mound. Through this action, which they perform at different times of the day, the holes serve as air valves that create an internal temperature conducive for survival. The design of the Eastgate tower mimics this action by enabling air flow from lower to upper levels via air channels.
Several other vernacular buildings in Africa such as those found in some traditional contexts maintain comfortable internal temperatures using organically derived concepts.
The increasing density of African cities such as Lagos, Accra, Kinshasa, Dar-es-Salaam and Harare and the activities they accommodate are beyond the scope of their ancient vernacular structures. But key sustainable concepts could be retained and translated for modern requirements.
The time has come to decolonise architectural theory and practice, so as to achieve sustainable built environments in developing African cities.
A United Kingdom court on Thursday ordered the British Virgin Islands firm, Process and Industrial Development, to pay £1.5m to Nigeria within 21 days.
According a statement by Dr. Umar Gwandu, the spokesperson for the Attorney-General of the Federation and Minister of Justice, Mr Abubakar Malami, the UK court ordered P&ID to pay the money to Nigeria to cover the legal costs incurred by the Federal Government in successfully obtaining the court’s permission for an extension of time to challenge the $10bn arbitral award the company obtained against Nigeria.
The statement read, “The Federal Republic of Nigeria today (Thursday) appeared in the English High Court for a scheduled hearing.
“The hearing followed the major victory secured by Federal Republic of Nigeria last Friday (September 4), allowing it to bring a fraud challenge against a $10bnn arbitration award obtained by vulture-fund-backed P&ID well outside the normal time limits.
“FRN will now proceed to a full fraud trial. The hearing today was held to decide procedural and costs issues relating to the FRN’s applications to challenge the arbitration award, and to determine the short term directions to trial.
“Cranston J ordered P&ID to make an interim payment of more than £1.5 million within 21 days to cover legal costs the FRN incurred as part of their successful application for the extension of time to challenge the arbitration award and procedural hearing earlier in the year.
“A case management conference to determine the full trial window is scheduled to take place after November 2020.”
The statement also stated that the Thursday’s order by the British court “is another crucial win for Nigeria in our ongoing fight against the vulture-fund-backed P&ID.”
It added, “We are pleased that the English courts have taken our fraud challenge seriously, and awarded us a substantial interim payment in respect of our successful application for an extension of time to challenge the award.”
Justice Ross Cranston had in a landmark judgment, on September 4, granted the Federal Government permission to challenge the final arbitral award delivered by a London arbitration tribunal in favour of P&ID and against Nigeria in January 2017.
The judge in the judgement agreed that there was prima facie case of fraud in the agreements leading to the award which should be inquired into.
The award which stood at $9.6bn as of 2019 has risen to $10bn.
The tribunal had held Nigeria liable for the alleged breach of a Gas Supply Processing Agreement it entered into with P&ID in 2010.
But the Nigerian government had approached the UK court requesting an extension of time within which to challenge the final arbitral award on the basis that the GSPA and the award were tainted by fraud.
This rebrand enables Dimension Data to consolidate its businesses, enhance efficiency and better deliver the changing technology needs of its clients in Nigeria
Integrated ICT services provider, Internet Solutions Limited is set to rebrand and operate as Dimension Data by the end of this year in all its operating companies.
This is part of Dimension Data's larger plan to consolidate its businesses, enhance efficiency, and better deliver the changing technology needs of its clients in Nigeria. Consequently, Olugbenga Olabiyi has been appointed as the Country Manager to head the company's business operations in this country.
Commenting on the new developments, Olabiyi assured clients that the company will continue to deliver services seamlessly and efficiently even as the firm works through the rebranding and integration process. He noted that they will be focusing on developing uniquely tailored IT solutions as well as providing value-driven services through customer engagement and outstanding technology infrastructure - that advance productivity and business growth.
"We are happy to have received the government’s approval allowing us to rebrand and operate as Dimension Data. Our vision is to be a partner of choice for businesses; delivering innovative, game-changing technology and solutions not only in Nigeria but in the Middle East and Africa," he said.
The Dimension Data Group of companies is also consolidating and rebranding all its subsidiaries in the Middle East and the rest of Africa where it has operations. The realignment saw Internet Solutions Managing Director Richard Hechle appointed to head the group's consolidated business in East and West Africa.
Dimension Data East and West Africa Managing Director Richard Hechle said consolidating the company's business will help the firm unlock opportunities for greater innovation, as well as giving clients the power to build their futures using game changing technology.
"Bringing all our people and operating companies together will allow us to effectively and efficiently execute our go-to market strategy and enable our clients’ success in a digital-first world. This digital-first world is characterised by technologies that are converging to deliver unified, hybrid and holistic solutions for real business impact," he said.
As the market around us continues to evolve, he said the company was conscious of the need to remain relevant by delivering products and services that enable clients to meet the increasing demand for personalisation and customisation. Leveraging technology is critical for businesses and our products and services play a vital role in empowering them to build their future.
The group is reorganising around five go-to-market areas to deliver Intelligent technology and services that are aligned to our clients’ journeys, including Intelligent Infrastructure, Intelligent Workplace & Customer Experience, Intelligent Business Applications, Intelligent Innovation, and Intelligent Cyber Security.
"Reorganising ourselves to deliver what the market demands is driven with growth in mind and we are very excited about the future and are committed to bringing these changes online quickly. The role of technology in business is changing, therefore, how it is consumed, and the decisions related to technology are also changing. We are adapting to align our organisation to that of our client choices,” Hechle said.
“The way we collaborate with our clients is where we create the most significant value and sustainable business outcomes for them. The logic is clear: the more we focus on seamless client experiences, the more focused we become on delivering solutions that work. We believe that when we understand our clients’ needs, we deliver better solutions.” he concluded.
There was palpable joy on Saturday as the first international, non-essential passenger flight landed at the Murtala Muhammed International Airport (MMIA), Lagos, for the first time in over three months.
The News Agency of Nigeria (NAN) reports that this was coming after five months of closure of the Nigerian airspace due to the lockdown occasioned by the Coronavirus (COVID-19) pandemic.
The Middle East Airline (MEA), which took off from Beirut, Lebanon, made history as the first international flight to land anywhere in the country as it touched down at the MMIA at exactly 2.30p.m.
The aircraft was ceremonially welcomed with a water cannon demonstration by the officials of the Aerodrome and Rescue Fire Fighters, a Department in the Federal Airports Authority of Nigeria (FAAN).
NAN also reports that officials of FAAN, Nigeria Immigration Service (NIS), Port Health Services (PHS), Nigeria Customs Service (NCS) and other relevant agencies were on ground to attend to the passengers brought in by the airline.
On arrival at the terminal, passengers presented their documents, including COVID-19 PCR test results for screening by the Port Health Services officials, while their travelling papers, passports and visas were handled by the immigration officials at the airport.
At the arrival and departure halls of the airport, the arriving and departing passengers observed the social distancing protocols, just as it was being currently observed on the domestic routes.
Speaking on the procedures, Abdullahi Usman, Comptroller, NIS, MMIA, said the process was seamless and passengers were cooperative while travelling documents were requested from them by the officials.
Some international airlines were yesterday denied entry into Nigeria when international flights finally resume on Saturday, September 5th.
The list of the airlines denied entry and those given approval to operate into the country was released yesterday in Abuja by the Aviation Minister, Senator Hadi Sirika
According to Sirika, some of the international airlines denied flight approval include, Air France, KLM, Etihad, Rwandair, Lufthansa, TAAG Angola Airlines and others.
He, however, said some airlines were denied approval because international flights were yet to resume in their countries. The two affected airlines are Cape Verde and South African airlines.
The airlines gave licence to operate include: ” British Airways, Delta Airline, Qatar Airways, Ethiopian Airlines, Egyptair, Air Peace, Virgin Atlantic, Asky, Africa World Airways (AWA), Air Cote-d’Ivoire, Kenya Airways, Emirate, and Turkish airlines”.
The Minister also warned that the approved airlines are expected to operate within COVID-19 protocols. Sirika also issued further guidelines for arriving and departing international passengers. Recall the country’s international airports had been closed to international flights since March due to the outbreak of the dreaded coronavirus. The resumption of international flights had once been postponed before the September date was agreed upon
- Vanguard News
Processing agricultural products – adding value by transforming them from basic commodities – increases their worth, appeal and market value. In the case of rice, processing is an important and distinct feature in its production. It involves changing harvested paddy into edible rice.
Nigeria’s rice processing techniques are inefficient. This has resulted in processed rice that’s too expensive and of a lower quality than rice from other countries like China, Vietnam and India.
Rice, one of the major staple foods in Nigeria, is consumed across all Nigerian socioeconomic classes. Still, only about 57% of the 6.7 million metric tonnes of rice consumed in Nigeria annually is locally produced. This leads to a supply deficit of about 3 million metric tonnes, which is imported.
Over 80% of locally produced rice comes from small scale processors with a processing capacity of less than 100 tonnes. And these small scale processors are faced with financial challenges that inform their choice of equipment. Large scale processors, on the other hand, constitute less than 20% of processors. They face the challenge of inconsistency in grain quality and insufficient paddy. Both small scale or cottage rice processors and large scale processors depend on paddy from farm lands or purchase from neighbouring villages or towns.
The processing procedure entails parboiling raw rice to soften the husk, drying and milling it before selling to distributors or retailers. After milling, small stones must be removed using a de-stoner. De-stoning rice makes locally processed rice more appealing. But the majority of the small scale processors cannot afford this equipment unless they form themselves into co-operatives to purchase one.
We conducted research to establish why Nigeria’s processed rice was of low quality. We wanted to establish what drove the decisions of Nigerian rice processors, specifically their choice of the techniques for the processing of rice.
We found out that, in many instances, Nigerian rice processors, especially the small scale or cottage processors, do not have adequate processing capacity. We discovered that the choice of techniques and equipment used during processing was a major determinant of output and quality. The choices rice processors made were driven by a host of factors. These included budgetary constraints, social and economic factors as well as processing constraints.
Factors affecting processing decisions
In a bid to identify the factors affecting rice processors’ decisions, we administered structured questionnaires to 410 rice processors selected from four states – Ebonyi, Ekiti, Ogun and Nasarawa – from three geo-political zones in Nigeria – Southeast, Southwest and North-Central. We asked them about processing. We wanted to know about their experiences, where they sourced their raw rice, their processing activities and techniques, if they had available credit to enhance their processing activities and the distance covered from farm to processing centre and from processing centre to the market.
The responses to the questions showed that choices were dependent on each processor’s finances and a number of social and processing characteristics. These included the age (youth or elderly), sex, education, marital status and household size of processors. Economic factors also played a role, including access to a loan to buy modern equipment, and the size of the processing operation. Even if they could afford new equipment, most didn’t have the capacity to service it.
Consequently, there were instances where processors formed themselves into co-operatives in a bid to access loans and other financial aid from the government with the aim of purchasing processing equipment. But the time lag for loan applications delayed productive activities. The outcome was many processors became discouraged, and abandoned trying to use new processing techniques and equipment. There were also instances where processors couldn’t get spare parts and de-stoning machines required to sift raw rice.
Organised markets in the country present obstacles too. They opted for parboiled imported rice from countries like Vietnam, Indonesia, China and India instead of locally processed rice. This is because to process a 50 kilogram bag of rice locally is more expensive and not economical.
Rice processors also encountered challenges with getting consistent quality and quantity of rice from local farmers all year round. They had to deal with fragmentation of the processing enterprise that makes it difficult to create quality brands and standards due to exorbitant cost of processing equipment.
What needs to be done
In 2019 the Nigerian government restricted the importation of rice into the country. But the directive failed to address the fact that locally processed rice is too expensive. In the case of low priced rice, the quality is poor.
There is therefore a need for the Nigerian Ministry of Agriculture and Rural Development to focus on how to get modern rice processing techniques to more processors. This would enable processors to take advantage of the openings and opportunities made available by the federal government.
This should include providing machines and equipment to rice processors in a bid to ensure Nigeria can produce high quality rice.
In addition, rice processors’ associations should be supported with input supply and credit. Female processors should be empowered with input supply, access to credit and proper monitoring. The research has shown that they are more likely to use traditional techniques than their male counterparts.
Finally, stakeholders such as the federal and state agriculture ministries, local governments and the private sector, should invest in modern rice processing equipment. This equipment should be situated close to rice processors with good access roads. This will ensure that processors aren’t burdened by the extra cost of transport and rice processing fees which most rice processors are not willing to pay.
Refineries in Nigeria, Africa’s top oil exporter, processed almost no crude oil in the 13 months to end June, according to the latest data published by the Nigerian National Petroleum Corporation (NNPC) on Thursday.
In the same period, operating costs for the country’s three main oil refineries, which the NNPC has shuttered pending revamps, totalled $367 million.
“No white product (Premium Motor Spirit and Dual Purpose Kerosene) was produced in June 2020 and apparently for the past 12 consecutive months. The lack of production is due to ongoing rehabilitation works at the refineries,” the report said.
The NNPC announced in April that it had closed all its oil refineries as it works to secure funding and a model to upgrade them, adding that when the Kaduna, Port Harcourt and Warri refineries are revived they would no longer be managed by the company.
For years the facilities have only worked sporadically due to underinvestment and the country faces an uphill battle to sell its oil abroad due to hollowed out demand from the coronavirus pandemic and abundant oil in global markets.
The NNPC report said that all but a tiny fraction of the country’s domestic fuel had come via an agreement between Nigeria and a large handful of companies to swap the nation’s crude oil for fuels, dubbed direct sale, direct-purchase (DSDP).
Just under 40,000 megatons of crude was the only oil processed by the country in the reporting period, the report added, only 2 percent of the country’s refining capacity.
“The declining operational performance is attributable to ongoing revamping of the refineries which is expected to further enhance capacity utilization once completed,” the NNPC added.
On a peninsula east of Lagos, 30,000 workers are employed on a project that holds out the promise of transforming Nigeria’s economic fortunes.
It’s here that Aliko Dangote, Africa’s richest man, plans to spend more than his net worth of $13.5 billion building one of the world’s biggest oil refineries. If he succeeds, he could end the irony of Africa’s biggest oil producer importing $7 billion of fuel a year, and instead see it meeting its own needs and supplying neighboring nations.
The collapse in the oil price and Nigeria’s woeful track record on industrial projects are significant risk factors. Yet Dangote’s bet has the potential to revolutionize Nigeria’s economy, with its operations adding $13 billion, or 2.3% to gross domestic product, according to a 2018 estimate by Renaissance Capital. Central Bank Governor Godwin Emefiele has said that the project could employ more than 70,000 people when operational.
“Yes, the risks are high, the challenges are high,” said Devakumar Edwin, chief executive officer of the refinery complex, who’s worked with the billionaire for about three decades. “But the rewards are also high.”
The site is stacked with superlatives. Nigeria’s largest-ever industrial project, it boasts a distillation column for separating crude into various fuels at different temperatures that is the largest of its kind in the world. The 650,000 barrel-per-day refinery is just part of a $15 billion petrochemical complex that will also house a gas processor and the world’s biggest plant for ammonia and urea, which is used in making plastics and fertilizer.
Still, Nigeria’s previous attempts at motor fuel self-sufficiency have come to nothing. Its four state-owned refineries, opened in the 1970s, ran at a fraction of capacity before they were closed in January for a revamp.
An initial attempt by Dangote to enter the refining business foundered. In 2007 he bought one of the state plants only to see that privatization swiftly reversed by a new government.
Earlier efforts to use industrial development as a way of cutting the country’s dependence on oil have mostly fallen short. Nigeria has sunk at least $5 billion into the Ajaokuta steel mill project on the banks of the Niger River since 1979, and it still isn’t in production.
“As a symbol of Nigerian progress it’s quite important,” Charles Robertson, chief economist at Renaissance in London, said of the Dangote refinery.
Nigeria needs all the help it can get. The nation is reeling from the impact of the Covid-19 pandemic and the record plunge in oil, which accounts for more than 90% of its foreign exchange earnings. It has been forced to devalue its currency, the naira, twice since March, and take its first-ever loan from the International Monetary Fund, which forecasts a 5.4% economic contraction this year.
Even for Dangote, who has built a business empire that includes cement factories around Africa and owns assets ranging from sugar mills to salt refining facilities, the petrochemical complex is ambitious.
“Nigeria will soon become the biggest and only urea exporter in sub-Saharan Africa for the first time,” Dangote said in March. “And we are not only exporting, we are exporting big time.” Fertilizer exports alone will generate about $2.5 billion in revenue annually, he said.
Roads and jetties had to be built to carry heavy cargoes, while a quarry with the capacity to store 10 million tons of granite was dug solely for the project.
The company has opened talks with oil producers for the supply of crude to the refinery, although it hopes that within two years of beginning operations as much as 100,000 barrels a day will come from two oilfields it bought from Royal Dutch Shell Plc, Edwin said.
It’s “a game-changing development for regional supply,” said Jeremy Parker, an analyst at Citac, a London-based consultancy on the oil refining and distribution business in Africa.
It also benefits from government backing. “We are encouraging every participant to establish refineries in this country,” Mele Kyari, group managing director of the state-owned Nigeria National Petroleum Corp, said on Tuesday. The aim is that in two-to-three years “you will see a country that will become a hub of producing petroleum products,” he said.
Still, the project has been hit by delays with the initial opening date having been projected to be 2016, then 2019. Edwin said in a webinar on Thursday that the start of operations will now be pushed back to late 2021 due to the coronavirus. Citac says the facility is unlikely to start before 2023.
It’s also entering a very competitive market at a time when refining margins are being squeezed by the collapse in oil prices. In July, profit margins for refineries were at their lowest since 2010 and Patrick Pouyanne, the chairman of Total SA, described them as “absolutely catastrophic.”
To be successful, the refinery will also need to displace the cartels that have dominated Nigeria’s fuel-import business for more than two decades, a source of wealth for the politically connected and motivation for the continuing dysfunction of domestic refineries.
Yet once up and running, it could be a strong symbol of industrial progress in a country that has had many false dawns in its quest to lessen its dependence on crude oil.
“It tips the balance in a country that is at heart very entrepreneurial,” said Antony Goldman, founder and chief executive officer of Promedia Consulting, a political risk consultancy firm. It says to Nigerians “we can make money from making things work.”