How Dangote Refinery, Globacom, Air Peace can be made global brands

The statement of defiance above was made during the agitation for crude oil allocation by Aliko Dangote for his $20 billion ultra-modern refinery, with a capacity of 650,000 barrels per day, reputed to be the biggest of its kind in the world.

The false alarm and uproar that Dangote Refinery was aiming to be a monopoly had escalated into a frenzy, prompting Alhaji Aliko Dangote, owner of the mega refinery, to respond in the manner captured in the opening quote of this piece.

The allegation was triggered when the Chief Executive Officer (CEO) of one of NNPC Ltd.’s subsidiaries, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Farouk Ahmed, reportedly reprimanded Dangote for crying out for access to crude produced in Nigeria and alleged that he is angling to be a monopolist in the oil sector, thus he became a spokesperson of sorts for vested interests that seem to prefer Nigeria to continue importing refined petroleum products from abroad to the detriment of the economy and harm to Nigerians.

According to media reports, the CEO of NMDPRA, in response to Dangote’s loudly expressed frustration over the non-allocation of crude oil to his refinery by International Oil Companies (IOCs) for local refining, had alleged that the diesel produced by Dangote Refinery had a higher sulfur content than the imported type and, therefore, was of lower quality. This claim was not proven scientifically, and to disprove it Dangote Refinery has produced Europe 5-quality fuel, an upgrade from the Euro 2 grade previously imported into Nigeria.

Therefore, the claim is being viewed as an unpatriotic attitude from the NMDPRA chief, as it contradicts the expected patriotic behavior of a public servant who should be encouraging local refining, which Dangote Refinery has now made a reality

After the tension, which was essentially a distraction, it was to the delight of the Nigerian masses when the good news arrived that the much-awaited flow of petrol from Dangote Refinery had finally materialised at the dawn of the 2nd day of September, 2024, when the announcement was made.

Although the refinery has been producing diesel, DPK, aviation fuel, and naphtha since January this year—nine months ago—there was a one-month delay in its originally scheduled August start date for petrol production, which was postponed but finally commenced at the beginning of September.

Given the bated breath of Nigerians in their expectation of constant supply of petrol described above, the realisation of the dream of locally refined Premium Motor Spirit, PMS after an estimated 28 years of comatose local refineries can be compared to the excitement in the quote attributed to Mungo Park, the Scottish explorer, who, upon first seeing the River Niger, famously said in 1796:  
  
“Oh, that my dear friend Mr. Anderson could have been here to have seen this beautiful sight. The river is even more beautiful than I had imagined, and I can now account for the doubts of the ancients as to its existence.”

The joy of Nigerians that Dangote Refinery has commenced refining Premium Motor Spirit (PMS)—so central to their lives—is significant, especially since the withdrawal of the subsidy on the commodity 15 months ago had reduced many to a severe state of hardship, with food inflation ballooning to around 40 per cent and putting a vast majority of Nigerians in a state of penury.

Previously, PMS had been so elusive to the majority of Nigerians that their relief over its production at Dangote Refinery can be measured through the lens of a people spared from wasting precious time at petrol stations—time that could have been spent on productive activities.

It is worth pointing out that  although the presence of Dangote Refinery may not necessarily lead to a significant reduction in the pump price of PMS, it is reassuring that the search for elusive petrol to power vehicles and light up homes—an activity that has cost many Nigerians their lives—will no longer be such an arduous and sometimes deadly task.

The constant availability of the commodity may also eliminate the crisis of crude oil theft driven by artisenal  refineries in the Niger delta zone of Nigeria where crude oil is being ‘cooked’ in the name of refining with huge collateral damages including loss of lives and ruinous effects on the ecological landscape of the hydrocarbon bearing region reminscent of the damage done to the ecosystem of the Democratic Republic of Congo, DRC by precious stone miners/minerals under the watch of Belgium, the former colonizer of the country.

The epochal flow of petrol from Dangote’s mega refinery has an interesting twist: while former President Muhammadu Buhari commissioned the refinery at the twilight of his administration on May 15 last year (his presidency ended on May 29), it is under President Bola Tinubu’s watch that the products refined in the ultra-modern refinery became available on the market. 

This reminds one of the Biblical narrative of Moses leading the Israelites to the Promised Land but not having the privilege of entering it, as punishment for disobedience to God’s instruction.

Without a doubt, Aliko Dangote is the richest African and the wealthiest black man, ranked the 132nd richest person in the world according to Bloomberg’s Billionaires Index. He is comparable to a Korean Chaebol in the making. If the Nigerian government chooses to elevate Dangote Refinery to that level for the benefit of the country.

In the event that Dangote Refinery is elevated to the level of a Chaebol—which is what this piece advocates and the strategy that South Korea applied in its developmental stage to make brands like Samsung, Daewoo, and LG global icons—it would serve as a counter force to the IOCs’ efforts to maintain the status quo of exporting crude oil extracted from Nigerian soil to their home countries for refining. Dangote Refinery, by refining crude oil locally and exporting it overseas, is poised to reverse this trend and earn Nigeria higher income in foreign currency and save our country the huge amount of naira chasing the dollar which petrol importers use to import petroleum products from foreign markets.

Evidently and commendably, Dangote’s bold initiative is disrupting and thwarting the over half-a-century-old business model of the IOCs, which has kept Nigeria a net exporter of raw materials, including commodities like crude oil, cocoa, and precious gemstones or solid minerals like lithium, copper, gold, and many others, without adding value.

This situation amounts to “Africa: Exporting Wealth, Importing Poverty,” which is the title and focus of my forthcoming book aimed at changing the negative narrative about Africa—that it is merely a source of raw materials. It may shock some to learn that being relegated to being a mere source of raw materials is the reason that the trade balance between Africa and its industrialised partners has been consistently in deficit.

The situation of IOCs producing crude oil in Nigeria and resisting sales to local Nigerian refineries is akin to the African adage of someone living on the bank of a river but using spittle to wash their hands. The situation was so dire that Dangote Refinery had to resort to importing its feedstock from as far away as the USA and Brazil, leveraging the platforms of global oil traders, Trafigura and Vitol.

The disturbing and inconvenient truth about the situation, wherein imperialists have perpetuated the ideal of Africa as a primary source of raw materials, would have continued unchallenged if not for the resistance mounted by entities like Dangote Refinery.

Even more disturbing is that it is Nigerians in strategic government agencies—nefarious ambassadors, if you will—who are tasked with managing our oil assets but are alleged to be colluding with overseas oil/gas equipment manufacturers.
To be continued tomorrow.
Magnus Onyibe, an entrepreneur, public policy analyst, author, wrote from Lagos, Nigeria.