Daily Watch – Dangote launches flagship refinery, US inserts Mali in Ukraine geopolitics

23rd May 2023

The Dangote Refinery has paid down over 70 percent of the debt acquired to build it as first refined products are set to hit the market by the end of July and early August, government officials say. Built at the cost of $18.5 billion, it was partly financed by debt from a consortium of local banks led by Access and Zenith and the other half by Dangote’s equity. The massive petrochemical complex is one of Nigeria’s single largest investments. The refinery cost $19 billion to build after years of delay – above initial estimates of between $12 billion and $14 billion – and has outstanding debt of around $2.75 billion, according to Central Bank Governor Godwin Emefiele. Nigeria spent $23.3 billion last year on petroleum product imports and consumes around 33 million litres of petrol a day. Dangote’s 650,000 barrels per day refinery plans to produce 53 million litres a day. The complex also has a 435-megawatt power station, deep seaport and fertiliser unit.

The Debt Management Office (DMO) has refuted the claim by Socio-Economic Rights and Accountability Project (SERAP) that Nigeria has defaulted in repaying its Chinese loans. SERAP in a statement had hailed the judgement that ordered Muhammadu Buhari’s administration to account for how it spent $460 million obtained from China to fund the Abuja Closed-Circuit Television project, which was not implemented. SERAP also quoted a report in its statement saying “Nigeria has failed to repay loans for which penalties stand at ₦41.31 billion.” But the DMO refuted the statement as “false” as Nigeria has not defaulted in its loan repayment. It said, “Nigeria is fully committed to housing its debt obligations and has not defaulted on any of its debt service obligations.”

Ghana’s central bank maintained its main interest rate at 29.5 percent, saying tight monetary policy and relative exchange rate stability were helping inflation fall. Bank of Ghana Governor Ernest Addison said the decline in headline inflation since the start of the year had been significant, noting the number of items in the Consumer Price Index basket registering inflation above 50 percent had dropped. Ghana’s consumer inflation slowed for the fourth consecutive month in April, to 41.2 percent year on year, after reaching a more than two-decade high of 54.1 percent in December. The International Monetary Fund’s executive board last week approved a $3 billion three-year support programme for Ghana, allowing for an immediate disbursement of about $600 million and a potential path out of the crisis.

The US State Department said Russia’s Wagner Group is trying to obscure its efforts to acquire military equipment for use in Ukraine, adding that Washington has been informed the mercenary force is seeking to move those acquisitions through Mali to aid Russia in its war. Wagner is willing to use false paperwork for such transactions, the State Department spokesperson, Matthew Miller, told reporters at a regular news briefing. “There are indications that Wagner has been attempting to purchase military systems from foreign suppliers and route these weapons through Mali as a third party,” Miller said. “We have not seen as of yet any indications that these acquisitions have been finalised or executed, but we are monitoring the situation closely,” he added.