AfDB President Adesina backs Dangote Refinery, calls for protection of local industries
“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?”
The President of the African Development Bank (AfDB) Akinwunmi Adesina has faulted the claims of “monopoly” against the chairman of the Dangote Group Aliko Dangote.
Dangote has in recent weeks been in a face-off with Nigerian authorities over the Dangote Refinery project and has also been accused of making inferior products.
In the wake of the impasse, he said the group’s board of directors has halted plans to invest in Nigeria’s steel industry “to prevent accusations of being branded a monopoly”.
While reacting to the development, Adesina described it as shocking and creating a bad image for Nigeria globally.
“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?” he wrote in a post on his X handle on Tuesday.
“In a nation that has been importing refined petroleum products for several decades, the abnormal simply became very normal. 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.
“Competition is good for everyone. But is Dangote refinery 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? Was it Dangote that held them back?
“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.
“We cannot and must not undermine, disparage or kill local industries, talk less of one that is of this scale — a jewel of industrialisation 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. 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.
