The president of the African Development Bank (AfDB) Group, Akinwumi Adesina, has defended the Dangote Refinery against allegations of potential monopolistic practices. His statement, shared by businessman Femi Otedola on Tuesday via X, cautioned that the controversy is damaging Nigeria’s global image.
Adesina described that monopolies are common in industries with high entry barriers or major capital requirements, such as railways and large-scale refineries. He pointed out that Dangote’s substantial $19.5 billion investment in the refinery should not be undermined by importers.
“Monopoly often exists 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? In a nation that has been importing refined petroleum products for several decades, the abnormal simply became very normal,” Adesina stated.
He emphasized the challenging and risky nature of manufacturing in Nigeria, citing policy uncertainties and reversals as significant obstacles. “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.
Addressing the issue of competition, Adesina questioned whether the Dangote Refinery is anti-competitive, arguing there is no evidence to support such claims. “Competition is good for everyone. But is Dangote refineries anti-competitive? What is the evidence? 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?” he asked.
Adesina argued that local refining should be the basis of competition, not importing petroleum products. “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 asserted.
He stressed the broader economic benefits of the Dangote Refinery, including domestic supply security, job creation, and reducing foreign exchange expenses. “We cannot and must not undermine, disparage or kill local industries, talk less of one that is of this scale — a jewel of industrialization in Nigeria. 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. We must not be myopic,” he said.
Adesina concluded by warning against disparaging Dangote’s contributions, highlighting the negative impact on Nigeria’s investment climate. “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? Investing is tough. Pettiness is easy. It sadly sends a signal that the price for sacrificing for Nigeria is to get sacrificed.”
