In a groundbreaking development, Saudi Arabia has pledged a significant investment in the comprehensive overhaul of Nigeria’s ageing oil refineries. The commitment was sealed during a bilateral meeting between Nigerian President Bola Tinubu and Saudi Crown Prince Mohammed bin Salman on the fringes of the Saudi-Africa summit in Riyadh.
Under President Tinubu’s ambitious reforms, aimed at enhancing the ease of doing business, Nigeria has embarked on a transformative journey, scrapping a popular petrol subsidy and unifying the country’s exchange rates. Despite these efforts, challenges persist, with liquidity slow to return to the official currency market and the naira maintaining a premium on the parallel market.
Information Minister Mohammed Idris disclosed that the Saudi government has pledged to make “a substantial deposit of foreign exchange to boost Nigeria’s forex liquidity.” Moreover, through the auspices of Saudi Aramco, the Saudi government will spearhead the revival of Nigeria’s four decrepit state refineries, with an anticipated completion timeline of two to three years.
Nigeria, Africa’s leading oil exporter, is grappling with foreign currency shortages, double-digit inflation, and security concerns, making these strategic investments crucial for economic revitalization. Despite previous efforts to achieve self-sufficiency in fuel production, Nigeria has been hampered by the failure to revamp its refineries, resulting in a dependence on imports.
President Tinubu, addressing potential Saudi Arabian investors at the summit, reassured them of the safety of their investments in Africa’s largest economy. Tinubu’s spokesperson, Ajuri Ngelale, quoted him promising investors “some of the world’s highest returns on investment.” The Nigerian leader also called for collaborative efforts to tackle security challenges, including Islamist insurgents such as Boko Haram, in Africa’s most populous nation.
Emphasising the enduring bilateral relationship, Tinubu stated, “Nigeria and Saudi Arabia have always enjoyed a special relationship at both the bilateral and multilateral levels. Within the past six decades, our bilateral cooperation has witnessed diversification to cover several areas of common interest.”
The agreements culminated in the signing of a memorandum of understanding on Thursday, further solidifying cooperation in the oil and gas industry. Both leaders committed to a six-month collaborative effort to “develop a comprehensive road map and blueprint” to ensure the successful implementation of the agreed-upon investments, according to Minister Idris.