Is the NMDPRA targeting Dangote or protecting a monopoly?

In the landscape of Nigerian business rivalries, few are as enduring and intense as the ongoing feud between Aliko Dangote and Abdulsamad Rabiu. This rivalry, fueled by competition over market share, corporate strategy, and personal pride, has spanned decades. However, while the cement war with Rabiu continues, Dangote now faces a new, formidable adversary: the Nigerian regulatory authorities and a government that once seemed to support his endeavours.

Recent allegations by Farouk Ahmed, head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), against Dangote’s $20 billion refinery have stirred significant controversy. Ahmed’s claims that the refinery’s products contain unsafe sulphur levels and that Dangote aims to monopolise the industry are serious. Yet, the absence of concrete evidence and basic regulatory infrastructure to validate these claims raises serious doubts about their legitimacy.

“Yet, the absence of concrete evidence and basic regulatory infrastructure to validate these claims raises serious doubts about their legitimacy.”

This dispute transcends issues of safety standards or market dominance; it highlights profound systemic flaws within Nigeria’s regulatory framework. The NMDPRA’s inability to provide scientific proof or a coherent response to these allegations undermines its credibility. More concerning is the possibility that these accusations are driven by political pressure, personal vendettas, or corporate sabotage.

The controversy underscores the inadequacy of Nigeria’s regulatory infrastructure. The reliance of the NMDPRA and the Nigerian National Petroleum Corporation (NNPC) on third-party labs for testing petroleum products is a glaring deficiency. How can a regulatory body enforce safety standards without the fundamental tools to verify compliance?

This scenario is not just embarrassing; it poses a risk to public safety and economic stability. If the accusations against Dangote’s refinery are accurate, the lack of proper testing facilities means potentially hazardous products could reach consumers. Conversely, if the allegations are baseless, they unjustly tarnish the reputation of one of Africa’s largest industrial projects and destabilise the market.

Read also: Crude politics between regulators and Dangote Refinery

Concerns about monopolistic practices are valid in any capitalist economy. However, Ahmed’s accusations against Dangote seem insincere when viewed against the backdrop of the NNPC’s dominant position. As the sole importer of petrol and primary issuer of import licenses for diesel, NNPC wields monopolistic power that stifles competition and innovation.

Furthermore, the claim of monopolistic practices seems hollow when considering the ongoing supply shortages and long queues at petrol stations. If Dangote’s refinery can alleviate these shortages, the priority should be ensuring compliance with safety standards, not undermining its operations with unsubstantiated accusations.

The timing and nature of these allegations cannot be separated from the political context. Dangote’s perceived political missteps, particularly during the 2023 elections, have left him vulnerable to attacks. The current administration’s handling of these disputes will reveal its commitment to fostering a fair and competitive business environment.

President Bola Ahmed Tinubu’s directive for a closed-door meeting among the feuding parties is a positive step but only a temporary fix. The real solution lies in overhauling the regulatory framework to ensure transparency, accountability, and the elimination of undue influence.

Nigeria stands at a critical juncture. The Dangote refinery controversy is a symptom of larger systemic issues that require urgent attention. Strengthening regulatory infrastructure by investing in state-of-the-art laboratories and training for regulatory bodies is essential to ensure they can independently verify compliance with safety standards. Additionally, implementing measures to guarantee that regulatory decisions are based on scientific evidence and free from political or corporate interference is crucial for transparency and accountability.

Encouraged competition is also vital. This can be achieved by dismantling monopolistic structures within NNPC and promoting private sector participation in the petroleum industry. Finally, fostering a collaborative approach between the government and private investors is necessary to address market needs and ensure regulatory compliance without resorting to public disputes.

In conclusion, the conflict between Dangote and regulatory authorities is more than a personal or corporate battle; it is a critical test of Nigeria’s regulatory integrity and economic resilience. The stakes are high, and the path forward demands courage, clarity, and an unwavering commitment to the principles of fair play and public welfare.

A resolution that prioritises the nation’s interests over personal agendas is imperative. By fostering a transparent, efficient, and predictable regulatory environment, Nigeria can attract investments, create jobs, and ensure the sustainable development of its oil and gas sector. This requires a concerted effort from the government, regulatory bodies, and the private sector to build trust, strengthen institutions, and prioritise the long-term interests of the nation.