Is Akinwumi Adeshina Right to Defend Monopoly Accusation? Slams Petrol Importers to Build Refineries to Rival Dangote

Amid rising accusations of a monopoly in Nigeria’s oil industry against Aliko Dangote, Akinwumi Adeshina, President of the African Development Bank, has taken a firm stand.

He criticized petrol importers who have been quick to accuse Aliko Dangote of monopolistic practices in the oil industry. His bold solution? Build local refineries.

Addressing the monopoly accusations

Recently, the spotlight has been on Aliko Dangote, the CEO of Dangote Group, with federal oil regulators suggesting he aims to monopolize the energy sector. These claims come in the wake of Dangote’s significant investment in a new refinery, which intends to reshape Nigeria’s dependency on imported petroleum.

Adeshina argues that the accusations are misplaced and advocates for a more industrious response. Rather than relying on imports, he encourages potential competitors to invest in local refinery operations. This, he believes, would foster healthy competition and contribute to the nation’s economic resilience.

Local vs. Imported

For decades, Nigeria has imported refined petroleum products, a practice that Adeshina describes as an ‘abnormal normal.’ He points out the illogicality of expecting a $19.5 billion investment in local manufacturing to compete unfairly with imported goods. 

According to him, establishing local refineries is not only about competition but also about supporting and sustaining local industries.

What to note

The controversy extends to Nigeria’s oil regulatory bodies, particularly the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which has flagged concerns over high sulfur levels in local refineries, including Dangote’s. Despite these challenges, Dangote has invited authorities to inspect his facilities to verify the quality of their output.

The Dangote Refinery, poised to be one of the largest oil refineries globally, aims to transform Nigeria from a petroleum importer to an exporter, ensuring energy security and economic stability. 

This initiative is expected to create thousands of jobs and significantly reduce the cost of petroleum products in Nigeria.