SHOWDOWN: NIGERIA’S DANGOTE VS GLOBAL OIL GIANTS

There is a pretty straight line from colonial exploitation to modern-day neocolonialism. Few African countries process their own raw materials - rather, the value is added elsewhere, and the finished products reimported, much to the benefit of foreign-owned companies. Multinational companies hold enormous economic and political power in post-independence African countries, a colonial hangover that’s seen them take part in illicit capital flight, pay low royalties and low rates of tax, provide little in the way of local employment and spur the destruction of local industries.

When Africa’s richest man, Aliko Dangote, announced that Nigeria would be moving up the value chain and that he would be building a 20-billion dollar, 650,000-barrels-a-day refinery that would meet domestic needs and export to the rest of Africa, ending the country’s age-old reliance on global oil giants, local importers and state regulators - who for decades have lived comfortably in those giants’ pockets - lost it.

Efforts to sabotage the project, the largest single-train refinery in the world, which began operations in January of 2023, got underway. The Dangote refinery, which represents a threat to the West’s lucrative refinery-products market share, has been struggling to acquire enough feedstock of Nigerian crude. Some of Europe’s largest refineries, like Shell and TotalEnergies, are owned by International Oil Companies (IOCs), and have for decades had a stranglehold on Nigeria’s oil industry. They essentially refused to sell crude to the Dangote refinery, insisting on a $6 premium above market price - forcing it to source crude from Brazil and the United States at a higher price.

It appears the objective is to ensure the Dangote refinery fails, guaranteeing that Nigeria continues to export raw crude and import refined products, making it dependent on IOCs, as it has been for decades. African Stream’s Erick Gavala takes a deep dive into this high-stakes showdown. Your reactions in the comments are appreciated.