and justice reign in peace or battle on earth. And this we count as day to hang on to our children with us. Oh God of all creation, grant is our one request. Help us to build a nation when no man is old. And so with Nigeria, please put your hands together if you love Nigeria.
Thank you so much and I warmly welcome you to this road show. It's day four and definitely it's been quite the run so far. We've been around, you know, different states and we had to bring it to this region. Definitely a region that's very important when it comes to oil production and contribution to Nigeria's gross domestic product. Thank you again for those that came in early. Please put your hands together for yourselves. It was great having you here.
And at this time I'd like to recognize some very important personalities right here with us. We have the director general Port Harcourt Chamber of Commerce, Mr. Phillip Oandu. Please put your hands together for him. We have Chief Isaac Wu. Please put your hands together for him. We also have Mr. Emmanuel Chedina. Please put your hands together for him. And we also have some very important customers here of the Dangote Group. Please put your hands together for them. They're right here with us.
And as I said before, today is not just about a refinery. It's about Nigeria's energy future. It's about potential opportunity for Nigeria's capital market. And we're also going to try and educate ourselves, investors, on what this business actually means for investors, what it means for Nigeria, what it means for energy security. Because I'm sure some of us in here, we've checked the price of oil this morning and I think it's down. Please put your hands together. Oil coming down. That's good. The price or you don't want the price of oil to come down. They like it above $100 per barrel, right? It's not good for the pumps, but we're happy for businesses like the Dangote Refinery. They're helping us, you know, get the energy that we need and hopefully at the right price.
But here, I want you to take notes. I want you to get your writing pen out because we have very important people in this room. We have doctors, we have professors, we have institutional investors, because these are people that would tell us what this business can actually do for us and even from a retail investor point of view. If you're putting your money in here, what do you stand to gain? You will find all of that out. And we also have some of our infrastructure people here that will, you know, put you through if you're trying to buy some of the IPO shares. We have some of them right here. We have the likes of Momo, we have GI Bank. They're all here to put you through. So, we're going to be moving things along quite fast as we can.
And at this moment, I'd like to specially welcome our guest of honor today, Chief Paul Usoro, SAN, the chairman of Access Bank PLC, founder and senior partner of Paul Usoro and Co., a leading commercial law firm, a former president of the Nigerian Bar Association between 2018 and 2020. He's acknowledged as Nigeria's foremost communications law expert and was the draftsman of the Nigerian Communications Act 2003 that regulates our telecom industry with over 40 years at the bar and as a fellow of the Chartered Institute of Arbitrators. He's a consummate boardroom player and strategist. Ladies and gentlemen, please put your hands together as we make welcome Chief Paul Usoro. Please keep clapping for him as he makes his way up here.
Okay. Thank you very much. Um, Vlad, good morning ladies and gentlemen. Morning. Um, let me start first by saying that, um, much as Ladi tried to paint me in those colors, I am not here as a lawyer. I am here as someone who is a part of the Dangote family and who is to also tell you that it makes a lot of sense that we invest in this industry. That is one aspect of why I'm here.
They also said something about where it all began. For me, it all began here because if I trek, I might get to my village. I'm from Edo, not far from here. So those of us who are from the South South, my message is going to be particularly to you today and that is that we have a stake in what happens as far as the Dangote refinery is concerned and we have a need to invest here. You're going to hear the economists talk about why it's a good investment, but I'm going to speak more from the ordinary person's perspective.
And maybe I should presume there are some of us who are old enough and who saw what fuel queues used to look like, right? That was just some years back. Take your mind back to how difficult it was and you know you're getting close to Christmas, you remember how it used to be. You'll get to the filling station and some people will spend two, three days at the filling station. But since Dangote refinery started operation, have you been seeing those queues? You haven't been seeing those queues. So when they say come and buy shares in Dangote refinery, they're saying in effect, come and join hands so that we will banish those challenges that we used to have.
So that we can say to our children, our grandchildren, that in our own time we made it impossible for you to go through the kind of suffering that we went through. I went through it. I have slept in a filling station before and some of us have slept in filling stations. It also means cooking gas. I see a lot of ladies here and sometimes we used to experience that scarcity of cooking gas. Think of how difficult it was that you might need to go back to firewood. So we are saying it's a good industry. Let's talk about the benefits we would have. It's a good industry for us to invest in. That's one part of what I said I would open with. But there's another part to it.
You know, it's already the industry is already a going concern. Where did the money come from? Yes, Aliko Dangote put some money but he took a lot of capital from the markets, from the international market. And as investment bankers who are here will tell you, capital only goes where it is certain that it can get something back. Which means those people who invested for it to get to the stage that we are and we can now invest knew that there was a good investment here. And they were not wrong because energy is still going to be a major issue not only in Nigeria. And by the way, are you people aware that the refinery sells outside the borders of Nigeria? It sells beyond Nigeria. It is selling to even the advanced countries. And that is telling you that the market is available.
And that is also telling you that the investment that you're being invited to come and take a part of is something you can actually have what investors like my brother Bismarck will tell you, very good returns. And that's why I'm happy that we are here and I'm sure there are quite a number of others who are also joining these events online. And so let me get back to where I started. Where do they get that oil from? It's from your backyard. Shouldn't we be the major people? In fact, I am more inclined to say that Dangote should sell us even his own shares so that we become the ones who are the major stakeholders in this industry because the oil is from here. But since we can't force him to sell even his own shares to us, the one that is available, we should be the majority that are buying those shares.
That is how we are going to show confidence in what is going on. But more than that, that is how we are going. You know, we always worry also about when the oil companies, they are taking oil from our grounds. What are they giving us back? In this instance, what you're going to get back is the huge returns that is guaranteed. Is the huge returns that will take care of your family. It will take care of your children's education. It will take care of your pension. It will take care of your health. It will take care of plenty of things in the community. And that's why today's session is important.
I am happy that the organizers have decided to bring not just people like me who will talk and tell you why it's beneficial from, in a manner of speaking, a pedestrian level, but they have also brought those who can speak to you in terms of numbers, who would tell you what is the need for you. But I also speak as somebody who has invested, so I'm not telling you to do the one that I haven't done. No, me, I have invested in the industry and I know that it's a good thing. One final thing, I was pleased to hear Ladi say that there are people who already belong to the Dangote family here. Lift your hands. Let me see you. I see some hands there. How do you feel? Can you tell us your experience? Is it not a family setting that you belong to? It's a family setting. Look at them there. They're shaking their heads. That is a family setting.
Now, what that tells you is investing in the organization is not like you are investing in some distant place. You get to become a part of the family. Forget those ones that they write in. I mean, I've seen some very interesting skits, some people saying that they have put 250,000 in the Dangote and that they are partners with Dangote, that Dangote should come and give their nice things. But in real sense, everything that Dangote does, and I should know, I have been associated with Dangote, they involve you as a family. And it means if you're putting money in this industry, it's going to be as if you're putting money in the family and you will get fantastic returns.
One good thing about being the chairman of a function is that you get to speak more than once. So I am not going to bore you any further. I would allow the experts to come in and speak because I know that before we finish I will come back again to tell you thank you for being so enthusiastic. Thank you very much ladies and gentlemen.
Please put your hands together again for him. Chief Paul Usoro, SAN, and they're helping us understand the best way possible, the layman way, on what this refinery actually means for Nigeria, what it means for retail investors and, you know, for those that feel like they want to invest in this company, what the importance of this company. You know, there's some businesses you see that tell you they want to sell an IPO or sell shares and you're trying to wrap your head around what this business actually does and you don't understand it. But I feel it's safe to say that we understand what is being sold here. Thank you again, Chief Paul Usoro, for helping us understand this much better.
And I did tell you before, we have very important personalities here. We also have our online audience. They're watching us around the world also trying to understand what to expect, you know, from this business. And definitely we have FCMB, we have Momo, we have GI Bank. They're right here ready to help any of us here that's trying to, you know, get our hands on the IPO at this point. And again I would like to acknowledge, you know, the presence of very important people right here with us and the family, as Chief Usoro said, the Dangote family is well represented in this room.
All right, we're going to be moving things along at this point and we're going to have very intelligent people. They're going to tell us the numbers. They're going to explain why you would want to put your money into this kind of business. I've done a little research on how the refinery business works and technically it's putting oil into the refinery and getting the things that we demand every day. The fuel that you have in your car, the jet fuel, the diesel, all of that. And we also have petrochemicals. What some of these plastic companies actually need to produce plastic, we get it from this same refinery. So, it's a very big business and we're definitely going to have it broken down to us in simple terms, very simple terms, so you understand what you're actually trying to get yourself into.
You understand the risk because every business has risk and from the little I know about a refinery, a refinery takes a lot of capital. It guzzles money. So we would understand all that part and what the refinery also stands to gain because it's all about the refining margin at this point, what they refine that oil for and what they're able to sell the finished product at. We'll get all of that information very soon. But for our first keynote right now, before I even introduce, I would like to say a big thank you to the Financial Derivatives Company team for putting this together today. Please put your hands together for FDC.
So our first keynote speaker is Mr. Bismarck Rwani. He doesn't need any introduction. I've had him on the show so many times and he's always ready to help us understand some of these tough economic terms, help us break it down and what it means for Nigeria's economy. He's the managing director and CEO of Financial Derivatives Company which he founded and has led for over three decades. A renowned economist with over 40 years experience in banking and finance. He currently serves as chairman of First City Monument Bank Limited, appointed June 2026, and chairman of Whitcleon Limited. He also serves on boards of Africa InfraPlus Fund Partners, British American Tobacco, Henkel Nigeria, and he's a facilitator at the Lagos Business School executive breakfast session. Ladies and gentlemen, please put your hands together as we make welcome Mr. Bismarck Rwani.
Thank you, Mr. Chairman. Special guest of honor, Alhaji Aliko Dangote, who will be joining us very soon. Ladies and gentlemen, let me stand on existing protocols. Can somebody give me the pointer? Somebody gave me the pointer so I can change the slides to upload the slides. Anyway, to start with, like we say in Nigeria, we stand on existing protocols and I could say where it all began. But to some context, the South South region of Nigeria where we all come from, we are here now, started this in 1957 in Oloibiri where we had crude oil.
We went on further to fight against environmental degradation. It was an environmental struggle. It became a struggle for resource control. It became a struggle for self-determination. And finally, it's becoming a struggle now to convert what we are as citizens to becoming investors. That's a major transition. A citizen pays tax. A citizen enjoys the benefit of security which the government gives to you, but an investor gets returns. So that's the major transition and we're going today to discuss this and why we must do it. So firstly, the Niger Delta struggle as we know it, the history of oil and refining in Nigeria and what will drive this outcome.
Yeah, get it there. Right. Okay. The struggle, as you can see here, the struggle. Yeah, that's a struggle. The Niger Delta is made up of Bayelsa, Delta, Rivers, Akwa Ibom, Cross River, Abia, and Edo state. Oil and gas key producing areas: Warri, Forcados, Escravos, which is the most important one, Bonny, Obagi, Soku, Olo, Nembe, Koko, Kolo Creek, Eket, Ebano, Uson, Oso, Era, Oredo, Olubo, Ibeno Coast, and Hai.
So, right, oil rich, development constrained because roads, drains, electricity, clean water and sanitation. You'll be surprised where the oil is produced and the level of affluence in this country and where the oil is consumed and the level of affluence is night and day. So that struggle for self-determination, that struggle for cleansing and dealing with the environmental struggle, that struggle for resource control and the pitance of 13% as derivation fund which to all intents and purposes has been abused, to now we are saying that not only will we get resource control, not only will we get derivation, not only will we get government participation, we will also own and invest in how it is used.
So infrastructure, the heart of oil wealth but still facing development gaps. Infrastructure is still a problem here. Livelihood and jobs, welfare of the people, accountability, environment, and we've dealt with this. So here we go. In all, 13% mineral revenue derivation, total amount is 3 trillion naira, a 5.7% increase from 1.84 trillion in 2023. Monumental poverty in the Niger Delta. You can see that Bayelsa has a poverty rate of 88%. Cross River has a poverty rate of 75%. Akwa Ibom has 71.3%, Rivers, where we are today, 62.4%, Delta 47.6% of the people are multidimensionally poor, 40% Edo, 35 Abia, 29, 27. As a matter of fact, the further you move to the oil producing area, the more multidimensionally poor you are, which is an odd thing.
Okay. So resource wealth can finance development. Look at Qatar, GDP of 2022, $221 billion, GDP per head of $69,000. Here we are talking about 1,500. They spent $200 billion hosting the World Cup two, three years ago. Public investment in education in Qatar, there are only 500,000 people, foreigners are 2 million people, 12.97 billion building human capital and world-class infrastructure, hosted the 2022 World Cup. Look at Kuwait, $157 billion, a GDP per head of $30,000, public investment of $7 billion, invest in assets that support services and private activity. Look at Algeria, $285 billion, GDP per head is $6,000, public investment is plus 60%.
So it is a truism that the more revenue you have, the more you invest, the more you invest, the more efficiently you invest and optimally you invest, the happier your people are going to be. If not, you end up with happy statistics and unhappy people. So the history of oil and refining in Nigeria.
Okay. So refining in Nigeria started in 1965. First refinery in Port Harcourt. But during the war, during the Biafra war, people were refining crude oil in this country without refineries. But that as far back as '66, '67, '68. So it's not new. In 1978, Warri refinery was commissioned. In 1980, Kaduna refinery was commissioned. By 1990 to 2010, declining refining performance and then we went into importing refined products and exporting crude. And then the whole idea of the negative word called subsidy, the way you define it, but subsidies are reverse taxes. In 2020, modular refineries gained momentum and 2024, large scale private refinery, Dangote refinery, started.
But let us step back. In 2007, Alhaji Aliko bought the Port Harcourt refinery, wrote his check for $500 million. And four weeks after or five weeks after the Obasanjo administration left, the Yar'Adua administration refunded Aliko's money to him. 2007 or 2006 actually, 2007. So 20 years later we are where we are. Can you imagine what would have happened if his money was not refunded? Well, hindsight is 20/20 vision, they say.
Oil refining as a hub and driver of growth. We have trade, plastics, construction, petrochemicals, manufacturing. The chairman of this occasion has done a lot of justice to that. Electricity and power, transport and logistics, agriculture. It creates backward linkages. Its output support transport, manufacturing and refining activity grew by 43.94% in Q2 2026. Please understand this. The Nigerian economy as a whole grew by 4%. Oil refining activity grew by 43%. 10 times the pace of the Nigerian economic growth. This sector has been in the doldrums for years.
So what will drive this outcome and our way ahead? One, top 10 Nigerian companies own corporates. Dangote Group, number one, refining, cement, fertilizer. Group, Globacom, telecommunications, oil and gas refining, Transcorp, power, Zenith Bank, United Bank of Africa, and Guarantee Trust. These are top nine of the 10 listed companies have operating presence in River State and Port Harcourt, including Globacom, NNPC Limited, BA, and others, Transport Group. So you are getting the feedback and return on investment for the stock exchange.
Stock exchange 10, 15 years ago, 10 years ago, total market capitalization was 8 trillion. Today we are at 162 trillion and we have not even listed. Today is the last day of the IPO. It will be listed in November. I want you to imagine what the stock market capitalization will be, in excess of 220 trillion naira in another four, five weeks from now. So this is how you must understand it. Please pardon my French and jargon.
What we have today is GDP of $278 billion. People sitting in this room, consumers, have 60% of that, 166 billion. The people that are investing, who will get the future, have 26%. That's high. And the government gets 4% nominal value, but in reality the government has fiscal dominance and a lot of influence. So what we are saying is that you're taking money from consumption and making you an investor. So not only will you consume the petrol, the gas, the petrochemicals, you will also begin to get a return on investment.
Right, and by so you will get. And then the key element here is the value of the naira. You see that thing called XUS M, exports minus imports, $27 billion. Because of the efficiency of this business, that is going to increase what we call the investment multiplier. So public private partnership, great capacity and efficiency. PPP helps convert private investment into public infrastructure, critical infrastructure, higher productivity and improved living standards. The chairman talked about queues. Queues is not just the time you sit down waiting in the gas station. It's time you could have used doing productive things. If there's no power, no electricity, no lights and all of that, it also increases and reduces your productivity.
So what we see here is that we are saying that you participate in this as an investor. You enjoy the benefit of regular consumption. You have the option of receiving your dividends in US dollars if that is what you want to have. It's an option. You also have the option of growing your investment. Don't forget if you look at various investments in this country, if you invested in MTN, I think the chairman will tell you a lot about that. When it started off as an IPO, it was 180 naira per share. I think today, a couple of years later, it's 900 naira per share and very huge dividends have been paid out.
You invested in Okomu Oil, you would have 20 times the amount you invested. You invested in Presco, you would have almost 18 times the amount you invested. You invested in Dangote Cement, maybe almost 15 times the amount you invested. So if you invested 5,000 naira in Dangote and times 10 or times 20, you'd probably be worth 100,000 naira in a few years from now and you'll be getting your dividend annually.
One thing about the refining business, of the top 10 refineries in the world, only one is in Africa. And that one is here in Nigeria. Refining business is high volume, low margin, but it's a hub. From here, you would see that products of the refinery go all the way across West and Central Africa. I think Dr. Muda is going to tell you about what happened in Kenya. Five of five heads of state were hanging around to invest, asking the people to invest in the Kenya refinery in Luma or Lemu now. Tells you a lot, right? A prophet is never known at home, but this one, the prophet is known at home and he's also known abroad. So you're having two for the price of one.
And it's no longer about a country, it's about a region. This is the largest IPO in Africa. This is an IPO which three countries, Kenya, Tanzania and Uganda, are getting their citizens to invest in that refinery. The joint venture between Ethiopia and the Dangote refinery is building the largest fertilizer plant in the world. You could tell today Donald Trump is talking about, look, diesel, diesel. Diesel comes out of the refinery. Diesel is determining what happens in the 19 days from now, there will be an election, midterm elections. The price of diesel is going to determine the outcome of the largest economy in the world, the politics of it.
So hold on to what you have. Make that transition from being a citizen to becoming a citizen plus an investor, and make that transition from being a citizen plus investor to becoming an African investor where the economies of scale and the benefits will accrue to all of us here. Thank you very much ladies and gentlemen.
Please put your hands together again for Mr. Bismarck Rwani. I love the way he breaks it down, especially with his very, you know, interesting slides. He makes you understand how any business, how it impacts the economy, the multiplier effect when it comes to creating jobs and all of that. And he did talk a lot about what's happening in the international space right now. We're seeing Nigeria actually filling gaps, you know, when it comes to the energy market, the international energy market. That's a huge deal. Please put your hands together again for Mr. Bismarck Rwani. Thank you, sir.
All right. At this moment, we'd also like to recognize the presence of the Access Bank team. They're also right here with us. We have Mr. Luro Laruaju, who's a regional director, Access Bank. They're here and we also have FCMB, we have Momo. They're all here to help any of us that are trying to, you know, get into this IPO. It's the final day, you know, at this point tomorrow, I guess. Mr. Ronnie, will it still be selling tomorrow? Mr. Ronnie, will it be selling tomorrow? It will be in the morning. Okay, fantastic. So, we have all of them right here to help you out.
So, as I said before, we have very intelligent people that'll be helping us break down the risk and the rewards of this business. We have doctors, we have professors, a very packed panel session, investors, institutional investors who will help us understand what this business actually means for Nigeria, for Africa and the world. And we have another very important keynote that's in the person of Dr. Muda Yusuf, who is the founder CEO of the Center for the Promotion of Private Enterprise, CPPE. I'm sure you've seen his publications every now and then on the news. It's Nigeria's foremost free enterprise think tank and immediate past director general of the Lagos Chamber of Commerce and Industry with over 30 years as a private sector advocacy leader, economist, and public policy analyst. He has influenced reforms in foreign exchange, energy, telecoms, trade policy and holds a doctorate in business administration from a Swiss business school. Ladies and gentlemen, please make welcome Dr. Muda Yusuf.
Thank you very much, the chairman of this occasion and special guest of honor, Mr. Bismarck Rwani. Distinguished ladies and gentlemen, please allow me to stand on the protocols that have been established in the interest of time. Well, my own perspective in this presentation is to look beyond the IPO and to underscore the importance of this refinery and this investment for the totality of the Nigerian economy. Anytime we talk about macroeconomic environment or macroeconomic fundamentals, what we are talking about is the foundation on which an economy stands. You cannot build something on nothing. So this particular investment has come to strengthen the macroeconomic fundamentals of the Nigerian economy. In other words, strengthen the foundation on which the economy stands. So that is the whole essence of this. So we'll be looking at the different dimensions of impact, current and potential impact on the Nigerian economy of this Dangote refinery.
Can you put up the slides please? Okay. I talked about impact on key macroeconomic variables. This is the outline. We look at the impact on economic diversification and industrialization. We look at issues of energy security, foreign exchange and balance of payment, capital formation and capital market development, employment generation and enterprise development. Then of course we look at government revenue which is going to be significantly impacted positively by this investment. You have already been told about the impact on regional trade and African market, how quite a number of African countries even beyond Africa are now looking up to this refinery for supplies. Then we look briefly at the policy priorities because no matter what you do, you need the right kind of policy environment to support the investment.
Now the Dangote refinery IPO is more than just capital raising. This is not just only about raising capital and I've heard Aliko say several times that if it is money, he has even had enough investors to fund it, but what he wanted is that he wanted an inclusive investment environment where every Nigerian will have the opportunity to be part of this. So we are looking at this as promoting capital markets, you know, transformation, industrialization, wealth creation and all of that. So it's a potential catalyst for capital markets formation and of course industrialization.
Then why the IPO matters? Just as Mr. Bismarck said, it's a landmark listing on the Nigerian capital market. In fact, many people who had no idea what investment is all about, who had no idea about what capital market is all about, and suddenly became interested about investing, making inquiries. We have never seen the level of awareness about capital market, about investing, as this particular IPO has generated. So it has had a significant impact on, you know, the capital market. And just as Mr. Bismarck said, this is going to take our market capitalization to over 200 trillion in a matter of weeks. So you can imagine the impact of that.
There's an opportunity to mobilize domestic and international institutional capital to broaden participation in ownership of strategic industrial infrastructure and stronger disclosure and governance and market discipline and potential funding for expansion. One of the beauties of this listing is that it will also expose the investment, the refinery, to a strengthened corporate governance, more disclosure and all of that. That is part of the beauty and that is part of the value of the IPO itself.
Then it has impact on growth, GDP growth, industrialization and economic diversification. We talk about domestic value addition. The beauty of industrialization lies to a large extent on domestic value addition and that is what this refinery is also bringing because the more you are able to backward integrate, the more you are able to generate all the key resources locally, the more impact it will have on the larger economy. So this is not an investment where you'll be depending 90% or more on imports. Certainly not. So this is a significant, you know, value that this investment is bringing.
Then of course stronger manufacturing and downstream petroleum linkages. We are going to see a lot in terms of the downstream sector and just as Mr. Bismarck said, the refining sector has been in recession for close to 10 years. If you look at the data from NBS, it has consistently been in negative but suddenly we are now seeing a growth rate of over 40%. It's a remarkable transformation. It also shows the power of private investment, the power of entrepreneurship in an economy. This is what this is also demonstrating.
Then of course opportunities for petrochemicals, packaging, plastics and related industries. The refinery is not only about PMS or petrol or about diesel or about aviation fuel. It is far more beyond that. That is also what is very distinct about this. Most of what you consume in industry, consumer market, most of these things are plastic related. Whether you are talking about furniture, you are talking about mobile, you are talking about packaging, name it, almost 80% is plastic and the major plastic raw materials are the petrochemical products which is also coming from this refinery. So it's going to have significant impact beyond just the refinery to other sectors of the economy.
Then potential productivity gains. Now the bigger a business, the bigger the opportunities to benefit from what you call economies of scale because it reduces your cost. It makes you a lot more competitive. So that is the value that the size of this investment will bring, you know, to the Nigerian economy. Yes, right now we have challenges about oil price and all of that, but we must distinguish between factors that are external and factors that are domestic. Most of the things that is happening to our fuel price today, diesel price, jet fuel, are largely external.
Before we had this Iran-US war, you were buying fuel at 750, 800. That was in February. But when Trump started bombing everywhere, creating all sorts of crisis, look at the crisis that it has created for everybody including his own country. So it's also good to have a distinction between what problems are local and what problems are external. But that is just an aside.
Yes, of course, reinforcement of Nigeria's transition. This will reduce our commodity exports, that you can be exporting refined products and that is where we should be as a country, not just exporting crude. You export crude, the only thing you get back is PMS. What happens to other derivatives, nobody accounts for it. But the fact that you have localized the industrialization and the processing, all those benefits are now being captured locally, which is a very important transition that we are seeing.
Okay. Foreign exchange and balance of payment. All of us are aware that if there's any benefit or any value we are seeing in the Nigerian economy today, it's the stability of our exchange rate. It may still be a bit high but it is extremely very stable and it's even appreciating and it's affecting even the prices of some of the things that we import. Part of the reasons we are having that is because you have this refinery because before now you were spending close to $10 billion, $15 billion importing petroleum products and those things were putting a lot of pressure on our reserves, on our balance of payment position. So the advent of this refinery has reduced that pressure.
So when you see the central bank saying that the exchange rate is stable, net reserve has gone to 40 something billion, this is largely where it is coming from. Although they may not directly give credit to the refinery but that is the story. So when you have an industrial complex that reduces your desire to import, it brings a lot of relief to the economy generally. It's not the Dangote that uses the dollars. It's almost everybody in the economy. So the stability that this has brought to exchange rate, to our reserves and generally to the confidence in the Nigerian economy is amazing. So it has helped the foreign exchange and balance of payment position which is actually very good.
Then of course capital market development and financial deepening. Mr. Bismarck has referred to this. We are going to see a transformation in our Nigerian capital market as we have never seen before and we are even beginning to see it. I talked to you about the awareness that has been created and we are going to see a lot more changes coming from this IPO and the Dangote refinery. Capital formation and capital investment mobilization, this is related to the last point I made. Even people who have never invested before in their lives are now thinking of investing. You know, that is the kind of impact that it has had in terms of capital formation and investment mobilization. We're even talking about new funds coming into the investment space and that is what makes an economy. When you are able to mobilize a lot more investment capital into the economy, that is what changes an economy for good.
Then employment, enterprise development and local content. This particular refinery has had an amazing impact on jobs. You need to visit the refinery to see many young Nigerians, engineers, male and female from different parts of the country working in that refinery. That is just even the direct, there are also the indirect impact. Those providing logistics, those who are selling the products, those who are shipping the products. It's immeasurable the kind of impact it has had on jobs, you know, and these are significant. Then expanding opportunities for contractors, logistics development, engineering, technical and industrial skills. No, stronger linkages and potential expansion of domestic demand.
What's happening? I hope I've not omitted some. Now fiscal revenue and government finances. The government is going to make a lot of money from this refinery and we pray that they spend it well. A lot of money will be made. Transfer of VAT, company tax and all of that because the more prosperous an industry is, the more taxes you pay, you know, to the government. So it's going to help the government a lot in terms of revenue.
Regional trade and Nigeria's position in Africa. We have been told how many African countries are looking up to Dangote refinery. Ghana, Togo, Cote d'Ivoire, Senegal, name them. All of them are already booking to take products and many of their presidents have visited the refinery. You know, this is the kind of impact that this is making on the African continent. And now we are talking about African Continental Free Trade Area. This is going to be one of our biggest leverage as far as the African Continental Free Trade Area is concerned.
Well, this is what I call the macroeconomic impact dashboard just to see a summary of the impact that this is having in different aspects of the economy. I'm sure this will be shared so that you can have more, can have time to go through it in the interest of time.
Then these are policy priorities. Just as I said at the beginning, if you have an investment, we need policies to support it. So we are also appealing to the government to ensure that you have the right kind of policy environment, the right kind of regulatory environment to support this investment and other investments for that matter given the critical role of private investment in an economy. So those are the key issues. Again in the interest of time I will not be able to go through them but those are the things that we expect from government to support this initiative. I think that should be all. Okay. Thank you very much.
Thank you sir. Please put your hands together again for Dr. Muda Yusuf for helping us check out the expectations for Nigeria's economy, for jobs and Nigeria's energy future going forward. All right. At this point we're going to also be having a virtual presentation from Professor Akpan Ekpo. He is a meritus professor of economics, public policy at the University of Uyo and chairman of the Foundation for Economic Research and Training, former vice chancellor of University of Uyo, pioneer VC of Akwa Ibom State University of Technology, a great guy, and definitely be joining us via Zoom to tell us about what to expect macroeconomically and other parts when it comes to the Dangote refinery IPO. We're going to listen to Professor Akpan Ekpo who is going to talk to us via Zoom. I believe we have Professor Akpan Ekpo. Professor, let us know if you're there.
>> Professor Akpan. >> Yeah, we can hear you. Okay. Sir.
Very important event indeed. Let me start by saying that it's important to thank the Dangote refinery and the organizers for having perhaps the last road show here in Port Harcourt, Rivers State, in the Niger Delta region of Nigeria. The company being private did not have to come here. Having the road show here is more than symbolic in my view. It demonstrates the conviction of the company that the history of crude oil extraction in Nigeria must not be forgotten and or taken for granted. The theme, I quote, 'It all started here' is apt because without crude oil being discovered here, perhaps Nigeria's economic story may have been different. Dangote refinery, the largest in the African continent as has been said, is offering 4.1 billion shares at 525 naira each with the potential to raise about 2.15 trillion naira, has illuminated interest nationally and globally.
In progress. Individuals have already. It is significant that the show takes place where it all started. Was built in history of manufacturing in Nigeria. Nigeria's largest. Barrels out of the world. And elevation that the economy above all the necessity of private part.
Aliko. The offer. The people's IPO, signifying his desire towards public ownership. The beauty of this is that all people can purchase shares and become participants in the affairs of the company going forward. It should be noted that a first-time investor can begin with a subscription of at least 10 shares while an adult can subscribe up to 5,000 shares. Parents and some parents subscribe on behalf of their children and thus introducing the coming generation to the idea of owning business as a long-term investment planning. I urge the audience in class to be part of this investment.
Let me take a peek at the physical context. Crude oil was first discovered in Oloibiri on Sunday 15 January 1956 by Shell in the present-day Bayelsa State. It is located about 45 miles, 72 km east of Yenagoa. The Oloibiri field is about 13.75 km and lies in the oil. The discovery of oil in commercial quantities was discovered in 12 areas of which Oloibiri was the most promising.
The field started oil production between late 1958 and the first oil from the field came at a rate of 4,000 barrels. Produced an average rate of 5,100 barrels of oil for the first year. The production thereafter as wells were completed and put on production and reached its peak in 1964. The field produced over 20 million barrels of oil during its 20 years. Oil production ended in 1978 and the field was abandoned the same year. According to reports, the oil field was abandoned without any improved recovery to drain some 21.26 million barrels of oil left from the field. This brief remains the fact that it all started here.
Now growth development, the description of Nigeria, change in country's economic governance dynamics, the sector resulted in resource curse, resulted in economies called disease. It should be noted that Nigeria's economic history can be said to be oil export provided revenue and foreign exchange for the economy. It remains the largest component of total export. However, oil to GDP but remains the most potent driver of revenue required to finance development in the country.
Revenue from oil, in my view, exotics while the output is stipulated by OPEC, a cartel of oil producers, hence it becomes challenging to finance and manage the country's development. Revenue from oil enhanced the growth of the economy while creating several challenges, warranting some pundits to postulate that discovery of oil. It has been argued that the oil would have done better for the economy if the episodes in revenues were well managed. Well managed. Some ascribed the challenge to government ownership of the various refineries in Warri, Port Harcourt and Kaduna.
It is an open secret that the country was exposed to and importing refined products. Consequently, corruption in various forms, the subsidy became permanent features in the oil sub-sector. Oil became a headwind in the country's resource and revenue sharing formula.
The challenge of onshore derivation, resource control and the rest once rattled the foundation of the economy. The entry of the Dangote refinery changed the game in Nigeria. Investment located in Lekki... February this year and April, it became the largest exporter of aviation fuel in the world.
Has opened the gates to potential investors, including such as availability, foreign exchange stability, as well as a vigorous environment as we know today. Overall, the economy in the wider economy with potential. Some of them are political, systemic and governance, and compliance and third-party challenges.
We are enhancing the stock market as well as bringing back trust in local entrepreneurs. Finally, it is gratifying that it has come to where it all started. It is more than a symbolic gesture and it helps all of us to take advantage of this opportunity and partake in the public.
I urge the group, especially the foundation, not to forget the building. They need to benefit from the resources which drive development. Thank you for not forgetting where it all started.
Thank you so much, Professor. I don't know if you can hear me, but thank you. We've been able to manage to get some of it, even though the internet is not allowing us and the connection. But please put your hands together for profound businesses. Not doing so well, and that is why we have experts here that will break it down for us what to expect for this Dangote refinery IPO. Thank you so much, all of you that have been here so far. Please put your hands together for yourselves. You've been a great sport. Thank you.
And Mr. Fani, I don't know, I'm going to take permission from you because I feel like doing a giveaway here. I don't know, maybe we'll do some IPO giveaway for some very lucky people right here. And it's just going to be just a few games at this point. I'd like you to tell me, if I say the name Dangote Group, tell me what it means to you in one word. Shall we do it? Maybe you might walk away with some free shares at this point. All right, Dangote Group, give me a word.
What does it mean to you, sir?
How do I put it now? Vision, economic stability.
Economic stability. All right, please put your hands together for him. Dangote Group means economic stability for him. Anyone else? Dangote Group. All right, I see your hand at the back there. All right, yeah, you can tell me. Opportunity. Please put your hands together for him. Opportunity. And we have one more there.
Global. Wow. Yes, global brand. That is so true. Yes, sir.
That's more than one word, but we'll take it at this point. African what? Solution to an African problem. All right, fantastic. That's a sentence, but we'll take it at this point. So, all of you that have answered, please, we're going to give you your shares very soon. But don't hold me. If you see me leaving here, please don't hold me. You know, you're going to get it.
Fantastic. All right. But very soon, we're going to hear from the president himself. He's going to give us a welcome address and definitely he's quite an incredible mind that's been able to start so many businesses. I did see something on social media recently. A time-traveling content creator. He went back many years, met Alhaji Dangote when he was young and he had a conversation with him, a very interesting one. And for some reason, Alhaji was very young and he was trying to collect 18,000 naira from someone, I think a family member or so, and he was having a conversation with him and he said that he wants to collect his 18,000 but the person is telling him, 'I will give you cement instead.' And I guess that was the turning point, you know, from that story. I feel like it's fiction. I don't know.
All right. So, very soon we'll definitely get an address, but for now, we'll wait for that. But there are other things we'll have to get going at this point. We'll definitely find out if we can actually start with, I know, that panel session, but at some point we'll start with it. But just give me one moment. Let's just make some quick confirmations at this point.
All right. So, right about now, we're going to prepare the stage for the panel session. Definitely going to be an interesting one. We have some very powerful minds right here that will help us understand this investment. It's not just about putting money because of the feeling of FOMO, because I know with all we've seen so far, some people might want to invest because of the fear of missing out. But now we'll let you know if that FOMO is what you should actually subscribe to at this time with this conversation. We have some doctors and professors, institutional investors to help us make sense of this.
In a country long defined by a painful contradiction, rich in crude oil, yet dependent on decades of imported fuel, one industrial complex now stands as both an answer and an argument.
This is not just a refinery. It is a statement.
A testament to vision, skill and execution. A declaration that Nigeria and Africa can refine at scale, supply itself, serve a region, and influence markets far beyond its shores. At the edge of the Atlantic in Ibeju-Lekki, Lagos, rises the Dangote Petroleum Refinery, Africa's largest refinery and the world's largest single-train refinery.
It is evolving with plans to expand beyond its current capacity towards becoming the largest refinery complex ever built in a single location.
The refinery was conceived in the last decade. Construction gathered pace after the project moved to Lekki, and over the years it grew into one of the most ambitious industrial builds ever attempted on the African continent.
All right, ladies and gentlemen, please put your hands together for yourselves. You guys have been very patient and we do appreciate you. Please put your hands together for yourselves. Lagos Business School, Pan-Atlantic University, and a professor of information systems with almost three decades in IT and financial services. She leads a sustainable, inclusive digital financial services initiative backed by the Bill and Melinda Gates Foundation. Great to have you, Professor. Welcome.
Fantastic. All right. We also have Mr. Arnold A. Dublin Green. He's the MD and CIO of BGL Asset Management with over 17 years' experience across developed, emerging and frontier markets. He previously led RENCAP Asset Management and Cordros Asset Management as CIO and held senior roles at Chapel Hill Denham.
Right. So when we're responding, we have mics closer to us or tilt it as close to you as possible and definitely this is a session that will be very enlightening. I want us to take out notes, write whatever information you get here. Before you spend a penny on this Dangote refinery IPO, you need to listen to this panel session. Thank you so much, sir. All right. So, Professor, I'll start with you. Definitely, I don't think just seeing the brand, they already have FOMO.
They feel like they're missing out on something. But at the end of the day, we need to understand what this business is, the risk, and the potential reward for the average investor out there. I'd like to get your reaction first to what we've seen.
I think as Nigerians we all have a role in institutional development and you're also betting on a skills environment that we need to build. And from an educational institution, we always look at it from that perspective. We're coming into an economy where we have what we call a demographic dividend because we have a large number of youth that are unemployed or underemployed. But then again, if we're not building industries, what are we going to do with these youth? So we could also be sitting on a bottle of gunpowder that could implode. So this opportunity gives us the idea that we're also investing in ourselves because at some point in time one of us will work maybe in Dangote or in an industry that is within that ecosystem as well. So it's win-win for all of us. And then finally, I think also it's about continuing to demonstrate a pathway for other industries because we have many industries in Nigeria that sometimes don't succeed beyond one generation or two generations. How do we use the stock market as an opportunity to ensure that industries do not die?
I'm a huge advocate for companies listing on the stock exchange, right? Because it gives everybody an opportunity to benefit from whatever profit, revenue growth that the company is experiencing. So for a Dangote refinery, which is pretty much the biggest company that we have in Nigeria, right, four times the size of MTN or Dangote Cement, and still cheaper than Seplat, right, to list and for everybody to have the opportunity to be involved in this sort of growth story, right? And I say growth story, which answers your question, the growth story because whatever money you give, or rather whatever shares you subscribe to, the proceeds are used to increase the production of the refinery. Right? So the refinery goes from 700,000 barrels a day to 1.4 million barrels a day in three years. Right? So if you want to watch any metric, you should pay attention to what the proceeds of the funds that you're putting in is used in, and it's to increase the production. And you know that you're in this company that is doubling its production. So for me, that's the main thing to look at. I think that there is no refinery in the world that is actually offering that opportunity, and that's something that everybody should be looking at.
All right. But looking at the opportunity at this point, do you think the average investor comes to domestic policy and international policy?
Well, before I respond to that, let me also latch on to what Mr. Green said about the culture of investment. Now, investment should not be limited to being an entrepreneur on your own. I'm not saying entrepreneurship is not good. But not everybody is cut out to be an entrepreneur. So if you have money and you are not sure you can run a business, if there are people who have set up platforms that can run the business well, that have track record, that you can trust, it is better to go and invest in their company because from data, about 70% or even 80% of small businesses die before they are one year old.
That's why sometimes when you look at your streets, somebody will set up a business, pay for rent, get a shop. If you pass there in another one year, he has closed down, another person has taken the shop. Go there in another one year, the person has packed up. No. So, a lot of small businesses lose money. It is good to set up a business, but if you know you are not cut out for that, this is a major investment window where you can put your money in businesses that are upcoming or that already exist and that have track record that will give you a lot more comfort. And of course, you need to be guided because even now with this IPO, there are all manner of people coming up claiming to be people who can help you to buy it. So you also need to shine your eye so you don't go and give your money to all manner of people, you know. So that for me, I think is a very important message for all of us.
Now coming to the point of policy, policy is very important. This is why I had a slide on policy environment. Policies can make or mar a business, and that is the role that those of us in business advocacy, that is the role we play to ensure that government puts in place policies that will support business. Government should ensure that there is consistency of policy. If you set up a business, I mean, we are talking about $20 billion worth of investment. This business has been set up based on particular policies. Imagine the government wakes up tomorrow and begins to change the policy. Are you going to be selling all the refinery equipment? Who are you going to sell it for? Who will buy it? So policy consistency is extremely very important.
And when we are talking about encouraging industrialization, we also need to put in place things that will encourage investment in industrialization. Because if you set up an industry and the government opens a floodgate for imports to be coming from China, from everywhere, it will be difficult for that business to stand. Because sometimes what is imported is of poor quality. Sometimes people come and dump things here. That is why some industries after some time they go down. Not because they are not good entrepreneurs, but because we did not manage our trade policy very well. So the trade policy aspect of policy is extremely important to support industrialization.
Then of course we need to ensure that we ensure stability of the macro environment, which we have achieved to a large extent, and I'm happy that this refinery is helping to even strengthen the stability of the macroeconomic environment by stabilizing our external position, by generating foreign exchange, and by reducing the pressure on our foreign reserves. So these are some of the things I think we need to do in the area of policy to ensure that some of all these investments, particularly these major investments, stand the test of time. Thank you.
Put your hands together for him.
It seems I lost my mic there. I guess I'll resort to this one now. So thank you so much, Dr. Muda, for that. But talking about policy still, recently we did hear from the Minister of Finance. You know, he talked about a price ceiling. You know, they're trying to negotiate a price ceiling, especially for refiners, for fuel importers, so that the price doesn't go maybe above 1,350 per liter. We did hear that. I believe it was this week the finance minister did recommend that. And I'm wondering, is that bad for the refinery?
No, you see, the principle of price modulation is not bad, but how you arrive at the modalities and the framework for it is extremely very important. You cannot shave a person's head in his absence. So engagement with those who are stakeholders is extremely very important before we make policy pronouncements, because it is the stakeholders that can bring the practical dimension of the implications of that policy and can advise on what can work and what cannot work.
So I think we need to ensure that we have adequate stakeholder consultation before we make such statements, and I trust that the finance minister is somebody that believes in consultation. I think after saying it, he should go back and consult stakeholders so that it also doesn't create problems for investors. You know, I think those things are very important for investor confidence. So policymakers don't just come up and make policy pronouncements. There should normally have been consultation on how you will deliver it, protecting the interest of the citizens and protecting the interest of investors as well. So that balance has to be ensured.
Fantastic. Yeah. All right. Professor, definitely I'd like you to also chime in there.
I agree. But the policy consultation has to be evidence-based. What data are we going to use to ensure that the good intentions? Because the motives are good, right? You want people to buy PMS at a lower cost. But then again, can that business keep its lights on if it's doing it at that cost? And those are things that we need to also address, that we're not robbing Peter to pay Paul, right? And what are going to be the unintended consequences? How do we factor all these things in? Because sometimes you have good intentions, but then again the way you came about the good intentions might not be right. And then how do we go about and ensure that we implement them and get the benefits and the outcomes that we said? Because you also don't want intermediaries to take advantage of the situation and then the end users or the people at the bottom of the pyramid are not getting the benefit of what you intended. So government does something, but then again it's not well implemented. It doesn't translate to the outcomes and benefits, and it's almost like it was never there. Thank you.
Thank you so much for that. Professor, I'd like to come to you now. Dr. Dublin Green, Mr. Dublin Green, definitely I'm sure you also look at all of this. You also look at, you know, policy and all of that. You know, you invest internationally, locally, and I'm sure policy is something that you look at, you know, very importantly. So what for you should retail investors be, should they concern themselves really, you know, when it comes to policy?
With what policy in particular?
Any policy from the government that affects this industry, the oil and gas industry?
Yeah. I mean, so first and foremost, I consider myself a macro investor, right? So a macro investor means I start from the country to see what the country looks like and I try to figure out where I think the country will be in 18 to 24 months, right? And then I look for a company, then I go micro, right? So I look for a company that plays out with where I think the country would be, right? First and foremost, Nigeria is an energy country regardless of how anybody sees it or what anybody says, right? Nigeria is a country that when oil is up, every investor locally or foreign likes Nigeria as a country, right? And then I look at central bank policies and what they do to benefit the businesses, right? So in saying those two things already, I'll be looking at oil and gas policies around, or policies around oil and gas and monetary policy, right? How easy is it, how cheap is it, or how easy is it for a company to be able to go into a bank and borrow money, right? So those are the two policies that I'll be looking at.
And so far, if I look at our monetary policy, the central bank is doing a good job. If we look at where we were before in terms of how tight the liquidity was and the reduction in monetary policy rates by 350 basis points that happened two or three weeks ago, it means to me that the policymakers are aware that we've come from a very tight liquidity environment where companies couldn't borrow or companies found it difficult to borrow because that affected how much debt they paid. And that also then boils down to the Dangote refinery, right? How much was the debt, right? And how hard was it for them to be able to get liquidity where they can. So so far in terms of policies, I'll be looking at policies around oil and gas because, like I said, Nigeria is an energy country, and I'll be looking at policies around liquidity and the ease of borrowing by the refinery.
Right. And talking about ease of borrowing, so definitely we had that MPR reset, reset cut, I guess we can use any word for it. And that is the cost of borrowing. It was reduced from about 26.5% to 23%. Do you think if it stays at 23% we're good when it comes to cost of borrowing, or should investors expect it to go lower?
Yeah, I think investors should expect it to go lower, right? Companies and the people should expect it to go lower. But one thing that investors need to now understand is when the cost of funds goes low, the return on investment also gets affected, right? So if your cost of funds or your cost of borrowing goes lower, it just means you also have to be more realistic in the terms of return you expect from whatever company or whatever bond or commercial paper that you buy.
Right. Thank you so much for that because definitely generally we would like to see cost of borrowing come down. We'd like to see the manufacturers actually getting affordable patient credit going forward. That would be nice. Let me come to Dr.
If I could also add, right, I think that as we go into a low inflationary environment, I'm sure we can all recall when inflation was in the 30s, right, and now inflation is at 15%. And so as we go into a low inflation environment, we have to now start expecting, I love to use the word demand, demanding the central bank, right, but expecting the central bank policy rates to actually go lower. And in that sense, we also now have to expect banks to lend lower as well.
Yeah. Banks to do more banking.
Yeah. It's one thing to get the reset, but it's another thing to go into the bank and get those rates.
All right. Dr. Muda, I'd like you to chime in here because I know you have also been very vocal when it comes to cost of credit. Talk to me, sir. What are we seeing so far? 23%. Are we celebrating? Is it good for a refinery of this structure?
