No New Refineries Likely in Africa Without Political Action on Rent-Seeking, Dangote Warns
Africa’s richest man and foremost industrialist, Aliko Dangote, has issued a stern warning that no major new refinery is likely to be developed on the continent unless entrenched rent-seeking interests in the petroleum sector are dismantled through decisive political will.
Speaking at the Global Commodity Insights Conference on West Africa’s refined fuel market, jointly organised by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and S&P Global Commodity Insights in Abuja, he highlighted structural barriers threatening refinery investments in Africa.
Delivering a presentation titled ‘Building an African Refinery Hub: Prospects and Challenges’, the President of the Dangote Group identified the massive Floating Storage Terminal off the coast of Lomé, Togo, as a particularly dangerous obstacle to Africa’s refining aspirations.
“The whole essence of the Lome floating market is to ensure that no refinery operates in sub-Saharan Africa,” Dangote said.
The offshore terminal, which accommodates over two million tonnes of petroleum products, serves as a key distribution point for imported fuels.
According to Dangote, it is dominated by international trading firms that take advantage of Africa’s insufficient refining capacity.
“This would later be sold at inflated prices, given the lack of local refinery capacity. But immediately, the Dangote refinery became operational, and they started driving down prices.
“But make no mistake, those who profit from this system will do everything they can to prevent other refineries from emerging,” he said.
Dangote underscored the need for unified continental reforms, saying, “The obstacle must be dismantled through policy alignment, regional cooperation and above all strong political will.”
He explained that the terminal’s dominance is not driven by price or operational efficiency, but by Africa’s dependence on imported petroleum products, stressing, “This sector has historically been a major avenue for corruption and rent-seeking.
“Let me speak to the third and perhaps the most complex category of contextual challenges. Beyond infrastructure deficits, the most formidable challenge we face is entrenched in rent-seeking within the petroleum value chain across many African countries”.
Dangote, however, warned that unless governments across Africa unite to confront the monopoly and embrace domestic refining, the continent would remain captive to foreign supply chains.
“Without political support, there is no way for any new large refinery to be built in our lifetime. What I would say is that if that support is not there, we will not.
“The entire people who are here with us, none of us will see a new refinery being built in our lifetime,” he said.
He described the scale of disruption his $20 billion refinery in Lekki had caused to global fuel traders who profit from Africa’s fuel imports.
“When you build a factory and disrupt that system, you are not just invading, you are actually going against powerful interests that will seriously fight back aggressively,” he explained.
Reflecting on the intense obstacles his refinery faced, Dangote issued a blunt warning to investors and policymakers, saying, “Let me be blunt: if strong political will is not mustered, nobody in this room, myself included, will live to see another major refinery built in sub-Saharan Africa”.
He repeated that Africa’s petroleum sector remains deeply vulnerable to sabotage and corruption, largely driven by those who benefit from its fuel import dependency, noting, “This sector has historically been a breeding ground for corruption and rent-seeking.
“When you build a refinery, you are disrupting powerful vested interests who thrive on Africa’s dependence on imported fuel”.
