Nigerian billionaire Femi Otedola took to his social media platform on Tuesday to express strong support for Aliko Dangote and his massive Dangote Refinery project.
Otedola’s post echoed comments from Akinwunmi Adesina, president of the African Development Bank, who argued that criticisms towards Dangote’s business practices are misguided and ultimately harmful to Nigeria’s economic development.
Otedola shared Adesina’s statement, which highlights the high barriers to entry in industries like large-scale oil refining.
Adesina argues that competition is good, but questions the feasibility of expecting smaller players to compete directly with Dangote’s refinery. He suggests that true competition would come from other companies building their own refineries in Nigeria, something they haven’t done for decades.
Adesina argues that limited competition in the sector stems from high entry barriers, not monopolistic practices by Dangote. He highlights the significant capital required for large-scale refineries, a challenge many potential competitors haven’t overcome.
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“No smart investor would make a $19.5 billion investment and want it to be undermined by importers,” Adesina stated. He emphasizes the long-standing reliance on imported refined products as a “self-defeating default mode” that hinders domestic production.
Adesina proposes a solution: “Let the importers set up local refineries and compete by refining in Nigeria.” This, he argues, creates a fairer and more productive competition.
The core of Adesina’s argument lies in supporting local industries, particularly large-scale ventures like Dangote’s refinery. He sees it as crucial for domestic supply security, job creation, and reducing reliance on foreign currency.
“We must not be myopic,” Adesina warns. “This whole disparaging of Dangote is uncalled for… Who will want to come and invest in a country that disparages and undermines its own largest investor?”
