Billionaire industrialist Alhaji Aliko Dangote issued a concerning forecast on Tuesday, emphasising that without strong political will, it is unlikely that any new major refineries will be established in sub-Saharan Africa during the lifetime of those currently involved in the industry.
Dangote made these blunt remarks during the ongoing Global Commodity Insights Conference on West African Refined Fuel Markets, an event being held by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in collaboration with S&P Global Insights.
Dangote identified “entrenched rent-seeking within the petroleum value chain across many African countries” as the most formidable challenge hindering the continent’s refining capacity.
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He characterised this sector as a historical hotbed for “corruption and rent-seeking,” where powerful interests aggressively fight back against any attempts to disrupt the status quo.
A key barrier, according to Dangote, is the “floating storage terminal off Lomé, Togo.” described this as a “uniquely African phenomenon” where international traders maintain a massive floating fleet of over 2 million tonnes of petroleum products just offshore. These products, he explained, were historically “sold at inflated prices, given the lack of local refinery capacity.”
However, Dangote noted a significant shift with the commissioning of his own refinery. “Immediately, the Dangote refinery became operational, and they started driving down prices,” he stated.
Despite this, he warned that “those who profit from this system will do everything they can to prevent other refineries from emerging.”
“When you build a factory and disrupt that system, you are not just invading, you are going against powerful interests that will seriously fight back aggressively. Another major barrier is the floating storage terminal off Lomé, Togo, a uniquely African phenomenon. International traders maintain a floating fleet of over 2 million tonnes of petroleum products just offshore.
“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.
“The whole essence of the Lome floating market is to ensure that no refinery operates in sub-Saharan Africa. I don’t see any new major refinery project succeeding in the existing offshore domain market. The obstacle must be dismantled through policy alignment, regional cooperation and above all strong political will.
“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.
“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 further drove home his point, declaring, “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.”
