Victor EzejaAfrican Development Bank (AfDB) group President, Dr Akinwumi Adesina and billionaire businessman, Femi Otedola, have joined calls for the Nigerian government to give adequate support to Dangote Petroleum Refinery Limited, highlighting the economic potential of the investment in the country.
This comes as President of Dangote Group, Aliko Dangote, is currently embroiled in a dispute with regulatory authorities in the Nigerian oil and gas sector.
Join our WhatsApp ChannelIn a statement on Tuesday, 23rd July 2024, Adesina, who is a former Minister of Agriculture said the ongoing controversy is “self-defeating” as it gives Nigeria a bad image in the international community. He said it sends a wrong signal to foreign investors that the country’s biggest indigenous investor is being disparaged and frustrated.
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“This whole disparaging of Dangote is uncalled for. It is self-defeating. And it is very bad for Nigeria. Who will want to come and invest in a country that disparages and undermines its own largest investor?,” Adesina asked.
“It sadly sends a signal that the price for sacrificing for Nigeria is to get sacrificed,” he stated.
The AfDB president highlighted the complexity and risks involved in large-scale investments such as the Dangote Refinery, especially in a challenging business environment like Nigeria.
Speaking on the accusations of monopoly slammed on Dangote, Adesina said it certainly would exist in a business environment “where there are high barriers to entry or high capital costs.”
“How many individuals or companies can do railways? How many can do refineries of the scale of Dangote Refineries?” he asked.
“In a nation that has been importing refined petroleum products for several decades, the abnormal simply became very normal.
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“No smart investor would make a $19.5 billion investment and want it to be undermined by importers.
“To manufacture is extremely expensive and risky. This is even more so in Nigeria, given the very challenging business and economic environment, fraught with policy uncertainties and policy reversals, and where the self-defeating default mode of ‘simply import it’ is always so easily rationalized and chorused to solve any problem.”
He said there is no evidence that Dangote is “anti-competitive”, adding that the billionaire investor did not prevent any other company from setting up refineries.
“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.”
He cautioned against undermining or killing local industries not to talk of a large-scale one such as Dangote Refinery, which he described as “a jewel of industrialisation in Nigeria.”
Stressing the importance of the refinery in improving energy security and economic growth in the country, Adesina said: “It is more than simply delivering the cheapest product to the market. It is about domestic supply security, driving (and yes, protecting) globally competitive industries, maximizing forward and backward linkages in the local economy, job creation, reducing forex expenses and shoring up the Naira.”
On his part, Otedola in a statement via his verified X handle, described Dangote as a visionary industrialist who has invested in different sectors not just in Nigeria but many other country across the world with great economic footprints.
He noted that Dangote is the largest private sector employer of labour in Nigeria, and his companies are among the largest taxpayers.
“In fact, the Dangote Group often pays more in taxes than the top banks combined. If not for him, we would still be importing cement,” Otedola stated, adding that “his contributions extend beyond industrial facilities to critical infrastructure, having built major roads such as the Apapa Oshodi-Owonrosoki Express Road, Wharf Road, and the Obajana-Kabba Road.”
Otedola, who is also chairman of Geregu Power Plc stressed that emerging countries in terms of industrialization need visionary leaders like Dangote.
He gave examples of countries like the United States, India, South Africa, Brazil, China and Vietnam among others who gave strong support to local businesses “to jump-start industrialization.”
He mentioned that US government gave substantial support to tech giants like Microsoft and Tesla.
“For example, in January 2010, the Department of Energy issued a $465 million loan to Tesla Motors to produce specially designed, all-electric plug-in vehicles and to develop a manufacturing facility in Fremont, California to produce battery packs, electric motors, and other powertrain components for powering these innovative vehicles.
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“In India, the government has been instrumental in supporting business titans like Gautam Adani and Mukesh Ambani. Their companies have received significant backing to grow and expand, contributing substantially to India’s economic growth and global business footprint.
“In Vietnam, the government has provided various incentives to tech companies, fostering a rapidly growing technology sector. In South Africa, government support for the mining industry has been crucial in maintaining its global competitiveness. Brazil has seen substantial government investment in its agricultural sector, transforming it into one of the world’s leading food exporters. In China, government backing for companies like Huawei and Alibaba has propelled them to global leadership in technology and e-commerce.”
He said there are “titans” like Aliko Dangote in Nigeria, who should be recognised and supported for the overall interest of the country.
He added that Dangote has “broken every boundary in worldwide business and industry.”
“Supporting local champions like Dangote is crucial for our national development and economic independence. Let us continue to foster and support these visionaries who drive our nation’s progress,” Otedola admonished.
Government Should Not Demarket Local Industries – MAN
Also, reacting to the face-off between Dangote and the agencies of the Federal Government, Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, warned against actions by government officials or agencies meant to demarket local industries.
Ajayi-Kadir urged government agencies performing regulatory roles to encourage an atmosphere that makes it possible for local businesses to prosper.
He said that there was no evidence to support the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s (NMDPRA) accusations of poor quality and monopolistic behavior against Dangote Refinery.
Ajayi-Kadir emphasised that local investors, especially the Dangote Industries Limited (DIL), are essential to Nigeria’s economic growth, tax revenue, job creation, and national development. Because of this, these investors need to be safeguarded and provided with the assistance they need to prosper in the current business climate.
He added that a corporate titan like Alhaji Aliko Dangote, who has investments in several economic sectors and throughout the African continent, ought to receive all the assistance required to expand, make investments in new areas, and enhance the welfare of the populace.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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