Nigerian businessman, Aliko Dangote has said Africa may never see the construction of any new large-scale refineries again, except the rent-seeking behaviors in the petroleum industry are addressed with decisive political measures.
He highlighted the Lomé Floating Storage Terminal, a large offshore oil facility located near the coast of Togo, as a significant obstacle to Africa’s goals for advancing its refining capabilities.
Dangote made the assertion at the ongoing Global Commodity Insights Conference on West African Refined Fuel Markets.
He noted that the terminal, which regularly holds more than two million tonnes of petroleum products, acts as a key storage site for imported fuel. This facility is primarily managed by influential international trading companies.
“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. This sector has historically been a major avenue for corruption and rent-seeking.”
“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. 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. In fact, 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.”
