Dangote on my mind…again
At the end of my series on Dangote last year, I really did not think that I would not return to that fascinating subject. Indeed, I am rather surprised that
At the end of my series on Dangote last year, I really did not think that I would not return to that fascinating subject. Indeed, I am rather surprised that I have not returned to it sooner than now. When the bombs started falling on many parts of Iran and the Strait of Hormuz was slammed shut by the Iranians, I knew that a return to Dangote had become inevitable and that return would have been sooner but for the drama that was playing out in the OK Corral that the Middle East region had suddenly been transformed into. It is rather ironic that what made the writing of this article inevitable was also responsible for keeping it off this platform until now.
When all those ruinously expensive war planes began their assault on Iran, the smart money was on the war to be over and done with, in a matter of days. This was especially true because it was reported that the government of Iran had been clinically decapitated in the very first wave of bombing. With the recognised leadership group decimated or, to use a word made popular by the garrulous US President, obliterated, the war should have been over after that initial wave of attacks carried out by the childishly named Department of war based in the Pentagon. But now, against all the initial expectations of a swift conclusion to the war, here we are with the predicted end to the war nowhere in sight and the Strait of Hormuz remaining shut by the Iranians and blockaded for good measure by the US Navy. The effect of this situation on the extraction of crude oil has had far reaching implications on the availability of much needed fuel all over the world. And the Dangote refinery has become such an important determinant of the availability of fuel in Nigeria that Dangote has now returned fully to centre stage.
The main point of discussion on the fuel issue in Nigeria was that of importation of fuel to supplement or, in some quarters, to provide competition for the products of the gigantic Dangote refinery. The weaponised word at the heart of this debate was 'monopoly'. This word was recklessly thrown around by an admittedly small group of people who in the last few decades had been making a killing through the importation of fuel from every corner of the world. The profitability of this venture was guaranteed by a thoroughly opaque system of subsidy payments which over the years had become endemic, not to say chronic, painfully so for the Nigerian economy. Money that could otherwise have been useful in building up the country was funneled into private pockets. In doing so, fabulous wealth built on thin air was created for a handful of Nigerians, leaving the vast majority to flounder in the Stygian darkness of poverty and constant want. It has been difficult for these people to be weaned from their attachment to cheap money and it is not surprising that they fought tooth and nail to protect their interests. But, the war in the Persian Gulf has come to settle this conundrum, dramatically and definitively. Without the Dangote refinery, our fuel bearing goose would have been well and truly cooked or, to put it more colourfully, we would have been consigned to battle up shit creek without a paddle. We would have been committed to bleeding crude oil and precious foreign exchange for an indefinite period of time to the detriment of of our development
The Strait of Hormuz has been out of commission for some sixty days now and no less than a fifth of global fuel stock has been dammed behind it. The response had been immediate, with the price of crude oil rising to record levels. This has been good news for Nigeria on the one hand and very bad news on the other. Revenue from the sale of crude oil has increased substantially but the increase in the pump price of fuel is wreaking havoc on personal finances. This is also because the increase in the cost of fuel has lit a fire under the rate of inflation just when we thought that this ravenous beast was on the verge of being tamed. The only thing providing a sliver of light amidst all the gloom is the Dangote refinery. We may be paying too much for fuel these days but at least those debilitating queues at filling stations are not yet back to torment us, to bring normal life as we knew it to a grinding halt. The Dangote refinery may be forced to rely on imported crude oil but its presence within our shores has been a comfort as far as fuel availability is concerned.
The volume of fuel imported into the country was trending towards zero before the ill advised Operation Epic Fury was let loose on the unsuspecting world and it appeared that the argument concerning fuel importation appeared to have been settled in favour of the local refining of crude oil. Not unexpectedly however, the demons in New York, the IMF or is it its twin, the World Bank, it really does not matter which, began to talk in favour of fuel importation ostensibly to prevent the monopoly of fuel supplies by the Dangote refinery. This ham-fisted attempt at interfering in the running of Nigeria's economy was however not allowed to gain any traction and that conversation was throttled at birth. But this shows that those global financial institutions are still very much interested in the control of the fuel market in Nigeria and for good reason. The United States is hell bent on controlling the global fuel supply chain, which is why Iran has been the target of their much vaunted military adventure. The emergence of the Dangote refinery is an obvious threat to this ambition and we need to be aware of the danger that this poses to that refinery. It should not be forgotten that Trump once referred to the Dangote refinery as a cover for Christian genocide in Nigeria. This proposition is obviously ridiculous but in the warped universe in which he lives, the implied threat that this entails must not be dismissed out of hand.
The Dangote refinery is not only important from the point of providing fuel and other petrochemicals. For all it is worth, there is still the matter of foreign exchange. The more the refinery fulfils our need for refined petroleum products, the less is our dependence on the US dollar. This is an irksome situation which is keeping at least a few US treasury officials awake at night and we cannot ignore the fact that even now, Nigeria, for one reason or the other features on a list of countries which are of concern to the United States. The Dangote refinery by its very existence, is of considerable concern to the US as it is a symbol of self determination. If one of us can build such a facility in Nigeria, it just might encourage others to imitate that achievement and build other complimentary infrastructure which will transform Nigeria into an industrial powerhouse which can become a competitor to other countries on the world stage. Nigeria is at present at a critical crossroads and how we proceed from here will depend very much how we proceed from here. There is little doubt that the world order is being reset as we speak and the only way by which we will be at the table which is being put together now, or in the words of Mark Carney of Canada be on the menu is for at least a few dozen Nigerians to follow Dangote's lead and kickstart the process of the industrialisation of this country. There really is no other way to give the next generation a leg to stand on in the global market place of the near future.
