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Dangote Refinery: Dangers Of A Single Narrative – Sifting Facts From Emotion – RICHARD AKINOLA

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2 years ago

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When the Dangote refinery controversy blew up, naturally as someone wired to support anyone l perceive to be oppressed, this time, Dangote, l lined up in support of the richest man in Africa.

I perceived he was being unduly treated by the Downstream and Midstream regulators, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). For days, l had heated arguments with people with opposing views on this matter. However, Ademola Adigun, one person l respect on this app, cautioned that people should not be too emotive on this matter but seek knowledge. I took that as a challenge.

Subsequently, in an attempt not to look foolish out of emotive consideration, l opened my mind to critically study the issues involved and even the nitty gritty technical details of the oil and gas system. And because l owe an obligation to educate people, l had to open up myself to information, researching on this issue and the petroleum sector, devoid of emotion.

While several groups of people, including one of my constituencies -the Civil society, have made pilgrimages to the humongous site of the Dangote refinery, unarguably, the largest private refinery in World, l decided, what in my opinion, was sifting facts from emotion. The issue has even reverberated in the hallowed Chambers of the House of Representatives, where the adhoc committee set up to investigate the issue, among other issues in the upstream and midstream petroleum section, was dissolved yesterday.

In a report today by Daily Nigeria, the Speaker, Abbas Tajuddeen, dissolved the committee over alleged compromise by some members of the committee who had exculpated the richest man in Africa, even before the assignment kicked off.

From my findings, there are three major critical issues that are affecting the operations of Dangote Refinery

1) CRUDE SUPPLY-FEEDSTOCK

It does appear that when Dangote was building the refinery, there were no proper arrangements on ground on how he will get feedstock for the refinery. His refinery is the largest single train refinery in the world.
Nobody builds and opens a refinery of this magnitude without refinery agreement to get feed stock. Dangote didn’t have a feedstock agreement for his refinery.

I have read where some people claimed that he has an agreement with NNPC Ltd but that arrangements was not a feed stock agreement. What happened with the NNPC arrangement was that during the project building phase, Dangote Refinery project got stuck and NNPC Ltd got the approval of the President to take equity.

Subsequently, the NNPC got a loan and paid $1bn as part of the 20 per cent equity while the rest was to be paid in crude supply.

The lack of feedstock was part of Dangote’s problem and he is now sourcing feedstock when the refinery is powered. So far, NNPC Ltd has given him 39 cargoes.

2) CRUDE OIL PRICES
Dangote’s claim that IOCs are selling crude oil to him at $6 per barrel above international price doesn’t seem to be true. What l discovered is that Crude oil has different grades. What he got from the US is WTI and the price is not the same as others.
Another key issue under pricing is that the margin of sale of crude oil is different because it is an international business. There is what is called market margin and it is usually from $1.5 to up to $20 per barrel.

There are several crude grades and Dangote Refinery uses different grades of crude to blend. So, when Dangote said he is importing from the United States, it is because he needs it as part of the grades to be used to blend in his refinery to produce petroleum products. His refinery needs several percentage of Bonny light, WTI and others to be able to blend very well. But he is using the fact that he imports from US to give the impression that he is importing from US and other countries, when in actual fact, is that he is sourcing different crude grades to blend.

Another critical point of under pricing is that the marketers buy this crude grades and add their own margin which ranges from $1.5 to $20 but the Nigerian government is giving it to Dangote at a margin of $0.5 per barrel which to me seems to me to be a good deal for him.

One other contentious issue is that Dangote is also persuading the regulator, to persuade the International Oil Companies to give him crude but the IOCs cannot do that because they have Production Sharing Contract (PSC) with the Nigerian government. Through the PSC, the IOCs produce, give Nigeria government its share and take the share of their crude and sell to marketers. Dangote didn’t enter any agreement with the IOCs to give him feedstock. What people must also know is that these IOCs borrow money from banks, invest in equipments, drill the oil fields, give government its share and take theirs, sell, recover their costs and make further investments.

Also, Dangote wants to use the local refinery obligation to obfuscate issues but this is not working for him because the local refinery obligation, according to the PIA, is based on a willing buyer and willing seller arrangement. This means the product must be available, and the parties must agree on the price in line with Section 109 of the PIA, which deals with the National Crude Oil Requirement of Refineries. The section states that the Nigerian Upstream Petroleum Regulatory Commission shall base the allocation of the domestic crude oil supply obligation applicable to the respective lessees on the National Crude Oil Demand requirement supply curve, which is the supply curve of crude oil or condensate that can be supplied on a voluntary basis at the prevailing international market price.

3) DOWNSTREAM
On the controversial issue of licensing of Dangote Refinery, while it has the license to build the plant, the refinery does not have license that covers other parts of its operations.

For monopoly, Dangote is asking the regulator to direct all oil marketers to get petroleum products from his refinery. But the question to ask is: Can Dangote guarantee Nigeria three billion liters of petroleum products per day in strategic national reserves for 32 days and not sell it? As a business entity, for Dangote to keep these products in strategic national reserves without selling them will lead to huge losses for him.

For the regulator to give Dangote that monopoly that he asking means that the business of other oil marketers would be killed and this is against the policy of deregulation because marketers should be allowed to import so there can be healthy competition.

Another critical point to note is that Dangote Refinery operates in a free trade zone and he will be exempted from paying tax to government. This is a loss of revenue to the government. The petroleum products from the refinery would be sold in foreign currency instead of naira to Nigerians as oil marketers who want to buy from there will fill form M (Importers form) in the bank.

Another contentious issue is the sulphur content in the petroleum products. It was reported in the media that the NMDPRA has minimum of 11 staff members in Dangote Refinery and all other local Refineries. The test of the petroleum products from the refinery are done daily and sent to the regulator. This means the regulator knows what they are saying when they stated that the product is inferior.

One worrisome aspect of the whole arrangement is that Dangote will need a minimum of $1.8bn working capital to operate the refinery and no bank would be willing to give it to him because he appears to be at a financial tight corner.

This was further confirmed with yesterday’s International Fitch ratings which downgraded the Dangote industries Limited, reflecting the precarious liquidity position of the business conglomerate.

The report stated inter alia that the group’s liquidity position, “followed lower than expected disposal proceeds, operational and financial underperformance compared to our prior expectations, also affected by local currency devaluation, and lack of contracted backup funding to repay its significant debt facilities maturing on 31 August 2024….We view the lack of DIL’s audited accounts for 2023 as a corporate governance issue. The RWN reflects uncertainty related to the group’s ability to refinance maturing debt.

“Lack of tangible steps to refinance or repay the maturing debt would lead to further downgrade while we do not expect a positive rating action until the company’s liquidity position improves substantially.”

I love Dangote and his can-do spirit, the reason l initially was emotive when this controversy broke when l felt he was being unduly treated but my study of the whole scenario has changed my perspective. I want him to succeed but he too has to do the needful. The monopolistic mindset which he carried from his cement business cannot work in the deregulated petroleum sector. More importantly, he needs a pragmatic approach to solve his liquidity challenges in this petroleum sector, which, with the benefit of hindsight, he underestimated, based on the seeming hand-in-gloves relationship he had with the previous leadership of the CBN, where it appeared he had “easy” access to funds.

Soji Adekunmbi, an Abuja based public policy analyst, in an article in The Cable, proffered solutions to Dangote to enable him navigate the humongous financial quagmire he seems to have found himself, when he posited: “A few options are available to Dangote but the most viable of them is that he should consider divesting some of his shares in the refinery. It may seem a difficult option but it is the best for him given the circumstances.

There are business entities who took a similar path when confronted with some of the challenges seemingly facing Dangote. In Saudi Arabia, the Saudi government sold Aramco, the national oil company to the public when it faced difficulties.

Even Microsoft founder, Bill Gates sold off a majority of his stake in the company retaining a mere five percent interest in the business. Gates took that route after facing anti-trade court cases following Microsoft’s monopolistic nature, which had caused the collapse of several IT companies.

Dangote should do the needful by selling shares to Nigerians as it is obvious given the intricate nature of business in the oil and gas sector particularly the huge capital outlay required to keep a business going, he cannot pull it off alone.”

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Court Mandates Interim Forfeiture Of Nine Assets Associated With Timipre Sylva

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1 day ago

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May 7, 2026

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A Federal High Court in Abuja, presided over by Justice Obiora Egwuatu has ordered the interim forfeiture of nine properties linked to Timipre Sylva, the former Minister of State for Petroleum Resources, to the Federal Government.

The order follows an ex parte application by the Economic and Financial Crimes Commission (EFCC), which alleges the assets are proceeds of “unlawful activities”.

Justice Obiora Egwuatu made the order after the Economic and Financial Crimes Commission counsel, Oluwaleke Atolagbe, moved an ex parte motion to the effect.

The News Agency of Nigeria reports that though Justice Egwuatu delivered the ruling on April 24, the enrolled order was sighted on Wednesday, May 6.

The affected assets are located across high-value areas in Abuja.

They include four blocks of terraces at Dakibiyu; a duplex with penthouse and office complex at No. 3, Niger Street, MStreet; one standalone duplex at Villa 1, Unit 1, Palm Springs Estate, Mpape; and a block of flats with 10 units of flats at No. 8, Sefadu Street, Wuse Zone 4, Abuja.

Others are blocks of flats with six units of flats at No. 1, Mubi Close, Garki, Abuja; two blocks with 12 units of flats at Plot 1181, Thaba Tseka Crescent, Wuse II, Abuja; one standalone duplex at No. 18, Nile Lake, Plot 1271, Maitama, Abuja,

The ninth property is a two-block building, which is currently occupied by the National Information Technology Development Agency, and is located at No. 5, Aguta Street, Garki, Abuja.

The judge said: “It is hereby ordered as follows: An interim order of this honourable court is made forfeiting the properties listed in the schedule attached herein, being properties suspected to be proceeds of some unlawful activities pending the publication and hearing of the motion on notice for final forfeiture order of the said properties.

“An order of this honourable court is made directing the publication of the interim order under order (1) above for anyone who is interested in the property to appear before this honourable court to show cause within 14 days why the final order of forfeiture should not be made in favour of the Federal Government of Nigeria.”

Justice Egwuatu also granted the EFCC’s request that the publication of the order shall be made in any two of the following newspapers: Thisday, Guardian, PUNCH, Vanguard, Tribune or Independent Newspapers within seven days from the receipt of the certified true copy of the order.

The judge then adjourned the matter until May 25 for a report of compliance.

The commission had, in the suit marked: FHC/ABJ/CS/607/2026, filed the application under provisions of the Advance Fee Fraud and Other Related Offences Act, 2006.

Moving the motion, Atolagbe sought an interim order, forfeiting the properties to the Federal Government pending the publication and hearing of the motion on notice for a final forfeiture order of the said properties.

He said the properties were suspected to be proceeds of some unlawful activities.

The lawyer urged the court to direct the anti-graft agency to make the publication of the order in any national newspaper for anyone who is interested in the properties to show cause within 14 days why the final order of forfeiture should not be made in favour of the Federal Government.

The PUNCH reports that Sylva, a former governor of Bayelsa State, has also been mentioned in connection with an alleged failed coup plot against President Bola Tinubu, though he has not been formally charged in that case and is reportedly still at large.

Nathaniel Shaibu is a correspondent at The PUNCH with three years of professional journalism experience. He covers the Federal Capital Territory (FCT), civil society, religion, and the Ministries of Women Affairs and Youth Development. In addition to his primary beats, Nathaniel also reports on politics, metro, security, and judicial matters, bringing clarity and balance to a wide range of public-interest stories. His work reflects hands-on newsroom experience, strong beat knowledge, and a commitment to accurate, responsible journalism.

 

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BANKING BEYOND THE BALANCE SHEET: UNION BANK’S ASBON RECOGNITION AND NIGERIA’S SMALL BUSINESS ECONOMY

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2 days ago

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May 6, 2026

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Union Bank of Nigeria has been named winner of the Best SME Growth Banking Initiatives Award (2025) at the Nigeria National SME Business Awards, organised by the Association of Small Business Owners of Nigeria (ASBON) in partnership with the Lagos State Government through the Ministry of Commerce, Cooperatives, Trade and Investment.

 

The recognition arrives at a moment when the relationship between Nigerian banks and Nigerian small businesses is being quietly redefined. Awards in this space have historically rewarded scale and product breadth. The ASBON criteria, by contrast, ask a more practical question: which banks are actually making it easier for entrepreneurs to operate?

 

WHY THIS AWARD, AND WHY NOW?

Across Nigeria, growth is no longer the only measure of success for a small or medium-sized enterprise. For most owners, success now looks like stability. Cashflow that holds up. Payments that clear without disruption. Financing that arrives in time to seize an opportunity rather than rescue a crisis. Operations that are not slowed by administrative friction.

 

That shift in what SMEs need has changed what they look for in a bank. The institutions earning their attention are the ones that take the daily reality of running a business in Nigeria seriously, not those with the longest catalogue of products. It is in that environment that the ASBON recognition reads as something more than ceremonial.

Union Bank’s SME work over the past year has been organised around a small number of practical priorities, and many of the issues SMEs cite as their biggest pain points sit at the centre of them.

 

FASTER ONBOARDING, MORE USABLE DIGITAL TOOLS

Account opening and customer onboarding have long been one of the slowest stages of business banking in Nigeria. For an entrepreneur trying to receive payments, pay suppliers, or qualify for a tender, days lost at this stage are days lost from the business itself.

 

Union Bank addressed this directly with enhancements to its Union360 platform and the rollout of a Straight-Through-Processing (STP) Digital Onboarding Platform. The intent was simple: cut the time between an SME deciding to bank with Union Bank and actually being able to transact. The improvements have meaningfully shortened onboarding, raised digital activity among SME customers, and brought in a notable cohort of new business clients.

 

Behind those improvements is a recognition that Nigerian SMEs are increasingly multi-channel by default. A small retailer may take payments by transfer, POS, mobile money, and online checkout in the course of a single afternoon. The bank that supports them has to be reliable across all of those rails, not just the ones that photograph well in product brochures.

 

FINANCING THAT MEETS BUSINESSES WHERE THEY ARE

Access to credit remains the most frequently cited barrier for Nigerian SMEs, particularly for businesses without conventional collateral or a long paper trail of audited accounts.

Union Bank’s response has been less about loosening criteria and more about widening the range of evidence that counts.

 

Consistent transaction history, active account use, and clear cashflow patterns now carry meaningful weight in how the Bank assesses a small business. For a generation of entrepreneurs whose operations are real but whose paperwork is light, that is a material change.

 

The Bank’s SME lending over the review period reflected this orientation, with funding directed at working capital, inventory, equipment, and the kind of operational expansion that sits between mere survival and genuine scale.

 

THE HUMAN SIDE OF THE WORK

Digital infrastructure matters, but it does not replace the value of someone an entrepreneur can actually call.

Union Bank’s SME engagement is supported by a network of relationship managers, direct sales agents, and branches across the country. The Bank’s “Adopt, Engage and Grow” campaign was designed to reach SMEs at this human level, not as a once-a-year touchpoint, but as a sustained relationship that meets businesses where they are, both physically and operationally.

The approach reflects a basic truth about small business banking in Nigeria.

 

Entrepreneurs operate under pressure that is rarely visible from a head office. The institutions they trust tend to be the ones whose people understand that pressure, respond when it matters, and treat the relationship as ongoing rather than transactional.

 

UNION BANK OF NIGERIA AND ASBON

Union Bank’s recognition is also tied to its partnership with ASBON, through the SME Empowerment Challenge run jointly by the two organisations.

 

The Challenge encouraged entrepreneurs to open or reactivate business accounts, maintain proper transaction records, and develop structured plans for growth. On its surface, it was a campaign. In substance, it was an attempt to nudge a behaviour that Nigerian SMEs themselves often identify as one of the hardest to sustain: the discipline of running the business as a business, with clean books, separated finances, and a clear view of where it is going.

 

That discipline matters because it is the gateway to almost everything else. Loans, grants, supplier credit, partnerships, and public sector contracts all depend on a business being able to show how it actually operates. By building that habit alongside ASBON, Union Bank invested in something that outlasts any single campaign cycle.

 

WHAT THE AWARD ACTUALLY SIGNALS

There is a tendency to read awards as endpoints. This one reads better as a signpost. Nigerian SMEs are operating in one of the most demanding business environments on the continent. They are also, collectively, the largest source of employment in the country and the most direct route to broad-based prosperity. The banks that serve them well, with patient infrastructure, accessible financing, real human engagement, and a partnership posture toward the wider SME ecosystem, have a role to play that goes well beyond commercial performance.

 

Union Bank’s recognition at the ASBON SME Awards 2025 is, in that sense, an acknowledgement of a posture as much as a portfolio. The work it points to, faster systems, more accessible credit, sustained engagement, and a habit of building alongside SME institutions rather than around them, is the kind of work that compounds quietly over years.

For a bank, that is the most useful kind of award to win. Not the one that celebrates a moment, but the one that confirms a direction.

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Polaris Bank Supports the Launch of NACCIMA Call Center to Drive Growth for Nigerian Exporters  

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2 days ago

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May 6, 2026

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Polaris Bank, Nigeria’s leading digital retail and commercial bank, has proudly facilitated the launch of the NACCIMA Export Support Call Center, a vital initiative designed to provide comprehensive support to Nigerian exporters, especially those operating in the non-oil sector and enhance their ability to access global markets.

 

This partnership marks a significant step in the Bank’s commitment to strengthening Nigeria’s export ecosystem.

 

Chris Ofikulu, Executive Director of Polaris Bank, in his address, emphasised the Bank’s commitment to empowering Nigerian businesses for global markets. He highlighted the importance of the NACCIMA Call Center as a key resource for exporters, offering valuable information, knowledge, expert guidance, and advisory services to navigate the complexities of international trade.

 

“Today, we are marking a pivotal moment in our mission to empower Nigerian businesses for global markets,” said Chris Ofikulu. “Through this collaboration, we are equipping exporters with the tools, infrastructure, and expertise needed to thrive in global markets.”

 

The NACCIMA Call Center, supported by Polaris Bank, will act as a key platform where exporters can access real-time information, technical assistance, and regulatory advisory services. This strategic initiative is in alignment with Polaris Bank’s vision to drive trade facilitation, improve market access, and support Nigeria’s economic growth.

 

Polaris Bank’s contribution includes providing advanced infrastructure such as laptops, a fully equipped workstation, internet-enabled modems, and high-capacity printers to support the operations of the center. This donation is aimed at ensuring the center runs smoothly and effectively meets the needs of Nigerian exporters.

 

During his speech, Ofikulu highlighted the importance of initiatives like the NACCIMA Call Center, emphasizing its role in bridging gaps for exporters, especially those in the non-oil export sector. “By offering exporters the right support, we are unlocking their potential to compete globally. This center is not just a call center; it is a catalyst for success, providing exporters with the resources, knowledge, and access they need to excel,” he added.

 

The partnership between Polaris Bank and NACCIMA also ties into the Bank’s broader mission to support Nigeria’s export sector. Polaris Bank provides a comprehensive range of solutions for exporters, including stock refinancing, working capital support, and advisory services on regulatory processes such as NXP documentation. Through its digital platform, VULTe, the Bank facilitates seamless intra-African trade, enabling faster and more efficient payments via the Pan-African Payment and Settlement System (PAPSS).

 

“We are excited to be part of this transformative initiative, which empowers Nigerian businesses to scale and compete on the global stage,” Ofikulu concluded. “Our focus on innovation and our dedication to supporting SMEs are central to our role in shaping the future of Nigeria’s export sector.”

 

Polaris Bank’s collaboration with NACCIMA reinforces its ongoing commitment to advancing Nigeria’s economic landscape by enhancing export readiness, improving access to finance, and supporting the growth of SMEs. The unveiling of the NACCIMA Call Center is a prime example of the Bank’s continuous dedication to driving positive change within Nigeria’s export ecosystem.

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