Billionaire industrialist and President of the Dangote Group, Alhaji Aliko Dangote, has declared that no new large-scale refinery project may ever be built in Africa unless entrenched rent-seeking interests in the petroleum sector are dismantled through bold political action.
He specifically mentioned the Lomé Floating Storage Terminal, a vast offshore oil depot situated just off the coast of Togo, as a major threat to Africa’s refining ambitions.
He said the terminal which houses over two million tonnes of petroleum products at any given time, serves as a strategic dumping ground for imported fuel, controlled almost exclusively by powerful international trading firms.
The African wealthiest Businessman declared this on Tuesday at the Global Commodity Insights Conference on West Africa’s refined fuel market, jointly organised by the NMDPRA and S&P Global Commodity Insights in Abuja.
He spoke during his presentation titled, “Building an African Refinery Hub: Prospects and Challenges”.
According to him, this floating storage hub has become the primary source of fuel supply to much of West and Central Africa, not because of efficiency or price competitiveness, but due to the continent’s chronic lack of refining capacity.
Dangote said, “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.”
He insisted that unless governments across Africa take collective action to break the monopoly of this terminal and prioritise domestic refining, the region will remain hostage to foreign supply chains that profit at Africa’s expense.
“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.
Speaking further, Dangote painted a grim picture of the hurdles his $20bn refinery in Lekki had to overcome and warned that other investors may never succeed unless decisive reforms are implemented.
“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,” Dangote said.
He identified corruption, rent-seeking, and sabotage by international oil traders as some of the most dangerous obstacles facing refinery development on the continent.
“This sector has historically been a breeding ground for corruption and rent-seeking. When you build a refinery, you are disrupting powerful vested interests who thrive on Africa’s dependence on imported fuel,” he said.
