African Development Bank President Defends Dangote Refinery Against Monopolistic Concerns
Akinwumi Adesina, President of the African Development Bank Group, has come out in defense of the Dangote Refinery, addressing concerns about potential monopolistic practices. In a statement shared by businessman Femi Otedola on Tuesday, Adesina expressed shock at the controversy surrounding Dangote’s operations, warning that it is “creating bad waves for Nigeria globally.”
Adesina argued that monopolies often arise in industries with high entry barriers or capital costs, citing railways and large-scale refineries as examples. “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 said. “In a nation that has been importing refined petroleum products for several decades, the abnormal simply became very normal.”
The AfDB President emphasized the significant investment made by Dangote, stating, “No smart investor would make a $19.5 billion investment and want it to be undermined by importers.” He highlighted manufacturing challenges in Nigeria, describing the business environment as fraught with policy uncertainties and reversals.
“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,” he said.
Addressing concerns about anti-competitive practices, Adesina said, “Competition is good for everyone. But is Dangote refineries 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?”
He stressed the broader economic implications of the refinery, stating, “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.”
Adesina emphasized the importance of domestic supply security, driving 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,” he said.
In conclusion, Adesina warned that the disparagement of Dangote is uncalled for, self-defeating, and 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.”
