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The president of the African Development Bank Group (AfDB), Akinwumi Adesina, has defended the efforts of Aliko Dangote, president of Dangote Group, to urge the government to ban fuel imports following the opening of his refinery. Adesina argued that the move is not anti-competitive as Dangote has not prevented other entities from establishing refineries in Nigeria.
Adesina shared these views in messages to several prominent Nigerians, which were included in a post on X by Femi Otedola, chairman of FBN Holdings and Geregu Power, on Tuesday.
In the post, Adesina pointed out that monopolies typically arise where there are high barriers to entry or significant capital costs.
“Has Dangote refineries prevented any other company from setting up refineries? Why have others not done so? How come they have not done so for several decades? Was it Dangote that held them back?” Adesina was quoted as saying.
He added, “But Dangote refineries surely cannot be asked to ‘compete’ with importers of petroleum products. That is not competition. Let the importers set up local refineries and compete by refining in Nigeria. That is fair and justified competition.”
Adesina’s comments came in response to claims by Nigerian authorities that Dangote, whose refinery is Africa’s largest at a cost of $19 billion, is seeking to ban petroleum product imports in Nigeria.
Before the Petroleum Industry Act (PIA) was signed into law in August 2021 by former president Muhammadu Buhari, the bill initially aimed to allow only refinery owners to import fuel into the country. This provision was removed after backlash from stakeholders before the PIA was approved.
Dangote, Africa’s richest man, has also faced regulatory challenges, including disputes with regulators, international oil companies (IOCs), and the state oil firm NNPC Ltd, over alleged sabotage of oil supply, hindering the smooth operation of his refinery, which commenced this year.
Adesina highlighted the manufacturing challenges in Nigeria, describing the business environment as plagued by policy uncertainties and reversals.
“To manufacture is extremely expensive and risky,” the post said. “The self-defeating default mode of ‘simply import it’ is always so easily rationalized and chorused to solve any problem.”
Companies registered with the Corporate Affairs Commission (CAC) as providers of goods and services in the downstream sector of the Nigerian oil and gas industry can apply for permits to import petroleum products.
Last month, Devakumar Edwin, vice president of oil and gas at Dangote Industries Limited, accused IOCs of deliberately frustrating the Dangote Oil Refinery by inflating local crude prices above market rates, forcing the refinery to import crude from distant countries like the United States, incurring high costs.
