The sight of long unending queues for Premium Motor Spirit (PMS), might soon be a thing of the past as BUA Group, a leading Foods & Infrastructure Conglomerates, says its 200,000 barrels per day Petroleum Refinery will commence full commercial operation in 2024, after a ground-breaking ceremony billed for May this year.
This is just the Founder and chairman of BUA Group, Abdulsamad Rabiu says stated the price of cement and sugar in the country is high because the local production of these products could not cater to demand.
According to sunnewsonline.com, Executive Chairman of BUA Group, Abdul Samad Rabiu who gave a graphic details on the economics of Nigeria’s second largest petroleum refining complex in Lagos at the weekend, said the project was initiated against the backdrop of the huge amount of foreign exchange the nation spends importing refined petroleum products into the country.
Rabiu who defended the sustainability of his Group’s investment in the various sectors of the economy, said the refinery project will meet the government’s economic diversification agenda in the long run, as new fuel standards continue to evolve in line with the climate crisis.
He said the project is being constructed with the best of technology from Axens of France rated as one of the best in the world in petroleum refining industry and would enable the nation save huge amounts of foreign exchange in addition to creating thousands of jobs for the citizens.
“ Nigeria consumes over 50million liters of fuel daily and over 90 of that is imported with about 35 percent of the country’s scarce foreign currency spent on imported products. This, coupled with low crude prices due to low demand arising from the Coronavirus pandemic offers us huge opportunity to invest in projects that would help us conserve more funds, leveraging the low cost technology being deployed by Axens of France offering us far lower cost than what it should be.” He said.
Rabiu further noted that the refinery’s complete marine infrastructure and nearness to its feedstock will enable it save more on haulage, as it targets local, regional and other land -locked markets in Africa, bolstered by its unique location and opportunities emerging from the AfCFTA.
According to him, the economics of the project are a ‘no-brainer’.
Contract for the construction of the refinery was signed in Paris between BUA Group Chairman Abdulsamad Rabiu, and the CEO of Axens, Jean Sentenac, in a ceremony presided over by France’s Minister Delegate for Foreign Trade and Economic Attractiveness, Franck Riester.
While calling on the Federal Government to improve the nation’s operating environment through liberalization of cement production to enable more manufacturers take advantage of the new Africa Continental Free Trade Agreement (AfCFTA), to export more to an estimated 1.3billion people across the continent, Rabiu said the continental economic bloc remained a critical strategy to develop the nation’s manufacturing sector currently in comatose.
He further urged the Nigerian stakeholders to insist on full implementation of rule of origin principle to avoid the country being turned into a dumping ground for goods manufactured outside the continent.
He said “if we are able to manufacture, we will have a huge market of about 1.3billion people to sell to within the trading bloc involving all 55 countries. On the other hand, if we fail to manufacture, then we may be turning our country to a dumping ground for other countries because we are all signatories to an agreement to remove all tariff barriers to trade including movement of goods and persons.”
The BUA Group’s Executive Chair lamented a situation where Europe and other continents have more access to Africa than Africans themselves, stressing that the AfCFTA offers Nigeria an enormous leverage to export more to other African countries than it is doing presently.
“It is more expensive to build in Nigeria than any other country in Africa.” He lamented. Commenting on the spike in the prices of sugar and cement, Rabiu, explained “that Nigeria has a population of over 200 million people, while cement production, for instance for last year was under 30 million tonnes.
“These numbers according to him do not support the assertion that Nigeria has attained a self-sufficient status in cement, and that the country can now start exporting cement.
“the price of cement and sugar is high in the country today because Nigeria cement companies don’t produce enough, as demand for these products outstrips supply in the Nigerian market”.
The BUA Group Chairman further explained that the sugar industry is battling with the same issue with the Backward Integration Programme (BIP) policy in place, as Nigeria has a situation where it has only three players and there is the BIP policy which states that unless you are seen to be doing a plantation you would not be allowed to do sugar refinery.
He specifically said: “In Nigeria, every day people come up to say we are self-sufficient in cement and that Nigeria can now start exporting cement; it not true. Look at the numbers: Nigeria is over 200 million people today in terms of its population. If you look at the production of cement, last year, we were under 30 million tonnes.
“In fact, last year was higher than the year before, which means that in 2019, we were doing between 26 million and 27 million. I am talking about production, and not installed capacity, which is another thing entirely. I am talking about actual cement production,” the statement said.
“To understand these figures, the metric that matters is – cement production to population ratio – which shows the amount of cement available to Nigerians per head. This figure, however, can be compared with other countries”.
Rabiu emphasised that Nigeria has a cement production to population ratio of about 130kg per head. While some countries in Africa, with lower production levels, are doing between 170kg to 200kg per head.
He stressed that Nigeria has the capacity to produce at least 300kg per head or about 60 million metric tonnes per annum – which is double the nation’s current production capacity.
With this metric, Rabiu gave emphasis to fact that Nigeria is actually producing less than other countries in Africa, apart from maybe the Niger Republic, hence the reason why the price of cement is high.
It would be recalled that the Management of BUA Cement Plc recently disclosed that the Company was set to sign a contract for the building of additional three production lines to be located in Adamawa, Sokoto and Edo States, with an installed capacity of 3 million metric tonnes per annum each this week.
In a related development, BUA Group Chairman said it has paid for 1 million doses of AstraZeneca COVID-19 vaccines for Nigeria through the AFREXIM Vaccine programme in partnership with CACOVID.
These doses of the vaccine which should be delivered by next week will be the first delivery of Vaccines to Nigeria since the COVID-19 vaccines became available.
According to BUA, the vaccines will be distributed free to Nigerians at no cost.
Rabiu, while thanking the President of the Afrexim Bank, Dr. Benedict Oramah for making the purchase possible and the Nigerian Central Bank Governor, Godwin Emefiele, for coordinating the process through the CACOVID Private Sector partnership.
According to him, “BUA decided to secure these 1million vaccines by paying the full amount for the vaccines today because these vaccines became available only last week through AFREXIM. We expect the vaccines to be delivered within the next 14 days and hope priority will be given to our frontline workers who have committed their lives to managing the pandemic.
In addition to this, BUA is committing to purchase 5 million doses for Nigeria as soon as they become available through this same arrangement.”, Rabiu added. This development effectively pushes Africa’s most populous nation to the front of the queue in vaccine
