It’s Dangote Vs. Tinubu, Stupid

The Battle Of Megalomaniacs: Why does everyone seem to miss the point? Why can’t Nigerians see that the ruckus in the Nigerian oil and gas sector is a battle between two sharks who seek total acquisition and complete takeover of the industry as part of their burgeoning personal empires?

But Providence is kind to Nigeria and Nigerians. It is Nigeria’s good fortune that Alhaji Aliko Dangote was able to build and complete his mammoth-size refinery against extreme odds.

It is also by a divine hand that President Bola Tinubu is the man at the helm in Nigeria today.
Were the set up otherwise, if the heavens had not purposed the twain to tango at this crucial juncture, Nigeria’s story of the oil and gas system would have been different and indeed, much detrimental to the Nigerian state.

Dangote Versus Buhari And Jonathan:

Had Dangote’s game-changing refinery been completed during the eras of Goodluck Jonathan or Muhammadu Buhari, it would have been another clean sweep moment for the doughty business moguls, Aliko.

Jonathan and Buhari would have only been too happy that Nigeria’s refining jinx had finally been broken. They would have been too happy to save the humongous foreign exchange deployed to importing refined petroleum products.

They would have set up a special committee in the NNPC to engage Dangote Refinery in areas of crude oil sale/swap; refining costs, appropriate local and international pricing of locally refined products, the right pump price for Nigerians, etc.
If either Jonathan or Buhari were president at this time, the pump price of petrol under Dangote’s refining system would never have exceeded N300 – 400/litre. Both Dangote and NNPC would still have made ample profits!

Remember there are at least a dozen more products derived from crude oil refining.
These include diesel (AGO) and aviation fuel which are priced even higher than petrol (pms).
With the twain of Jonathan and Buhari, a win-win deal would have been extracted first for Nigerians, the federal government and for Dangote and his refinery.

Dangote Versus Tinubu:
But today, between Dangote and President Bola Tinubu who is also the Petroleum Minister, the centre cannot seem to hold. This is because their first interests may not be sovereign.

While Aliko has his eyes fixed on the global rich list, Tinubu is a well-known, tireless empire builder. This explains why at this juncture of Nigeria’s history, two megalomaniacs are clashing over the control of Nigeria’s most valuable economic assets, oil and gas.

This explains why there’s currently no agreement in the industry.
It is this clash of strong personal interest that is driving this seeming crisis. Nigeria achieved a major milestone in the world of oil and gas business: huge refining capacity.
Why have we not rolled out the drums in celebration as one of the biggest refinery hums to life in Nigeria?

Instead, our energy issues seem to multiply! Consider the seeming malady of Dangote Refinery importing crude oil and exporting refined products while the NNPC is exporting crude and its independent marketers are importing refined fuels!

Imagine also, the mind-bending situation in which petroleum products are priced lower in many African countries with less crude oil deposits.

Nigeria is a laughing stock of the world that marvels at this bizarre conundrum. For instance, Egypt, unlike Nigeria, is not a major oil producing country yet petrol pump price is significantly less ($0.40 per litre) against Nigeria’s $0.66 per litre.

This is because Egypt subsidises petrol consumption for her people. But Nigeria couldn’t manage a subsidy regime. At a point, she was subsidising corruption. Indeed, her entire oil industry is seized by sleaze.

Corruption Fighting Corruption:

The recent scuffle between Aliko Dangote and the ousted CEO Of NMDPRA, Mr Umar Farouk is an offshoot of Nigeria’s sordid oil industry.

While the coming of Dangote may moderate the age-old bad ways of government officials, Aliko Dangote comes with his special brand of dodgy business practice.

NMDPRA (Nigeria Midstream and Downstream Petroleum Regulatory Agency) led by Farouk had antagonised Dangote and his refinery since inception about two years ago.

He accused Dangote of “regulatory capture”, that his business model depended on opacity, as well as producing substandard products, among other issues.

A few days ago, Dangote dug deeper and shafted Farouk. He opened his behind, Farouk allegedly spent about $5 million in paying fees in Europe’s best schools for his children.

That’s a knockout punch of course and coming from the most influential business man in Africa, it had to be a knock out.
Farouk fell. He was fired with an alacrity not known in this government.

It’s common knowledge that Nigerian National Petroleum Corporation and the entire government-controlled oil sector in Nigeria is a house founded on graft.

If all Farouk, a CEO, could garner was only $5m then he has to be a saint. Government agencies like the Customs, Immigrations, Revenues Service, Maritime, to name a few, are honeypots for quick riches. It is given that you would be stupendously rich for working in these places.

Dangote, The Oligopolist Goes For Nigeria’s Jugular:

Make no mistakes about it, Dangote is not a crusader! Even if he were, he crusades only one interest: his own.

We must therefore watch him closely now that he has Nigeria’s oil industry in his back pocket.
Dangote is actually as ‘bad’ as they come. His ways and methods are of course, different, but bad all the same.

First, he works with any government in power to have his ways. He will eventually make sweetheart deals with President Tinubu to get his desired margins both for his crude and refined products. He already has oil blocks of his own so he will drill his own crude, refine and fix his price.

Over the years, he had colluded with successive presidents to enjoy exclusive waivers that have been described as economic sabotage by analysts.

Dangote is an arch-oligopolist. He is a well known shark who devours competition in any industry he operates. And he operates in so many sectors of the economy. He dominates them all.

He did it in the sugar subsector in his early days where he laid Tate & Lyle, a major producer, prostate and eventually deleted them from existence, leading to the untimely transition of T & L’s then MD.

In the rice importation race of the 90s, Aliko beat off competition. The stubborn ones he eventually annihilated with a dose of pricing poison: selling at ridiculously below market price (at a loss) to wipe out smaller competitors. By the time he was done with them, they became his distributors.

Aliko’s bar knuckle war in the cement sector is still raging. After killing off Ibeto Cement, Dangote controlled about 70% of Nigeria’s market. It took the coming to the scene, and fighting spirit of BUA Cement to curtail the overwhelming influence of Dangote Cement. Yet he still controls about 55% of the cement market till date.

Antitrust laws would have wound down Dangote if he were operating in Europe or America. He doesn’t operate in any industry he doesn’t dominate to the point of fixing the prices.

Who Regulates Dangote:

Disgraced Farouk was trying to tell Nigerians something. But while he whimpered about regulatory capture, and opacity in Dangote’s operational model, the mogul moved swiftly to cut him down. Farouk didn’t see it coming. With this treatment, NMDPRA has been totally captured and castrated. No CEO in NMDPRA would dare look Dangote in the face again. Dangote is now the operator and regulator in Nigeria’s oil and gas industry. That is dangerous.

Nigerians must be wary because the more Dangote dominates a sector, the more prices rise. You would think increased capacity and local production would lead to reduction in price, no.

It’s the other way round for him. This is why many complain that he’s building his global rich list standing on the graves of hapless Nigerians.

For instance, there’s no reason locally produced fuels would be more expensive than imported ones. Not in a major crude oil producing country. Not in an impoverished environment where more than half of the population are dirt-poor. These abundant natural resources ought to be deployed to lift Nigerians out of poverty and not further trample them into the dust.
In summary, now that a hawk is contending with another, how would the drama pan out? Will Nigeria be better for it at last?

*Last Line: Merry Christmas to all our readers. Regardless of the gruelling economy and our misbegotten leaderships which seem to work against the interest of the people, let’s rejoice in this season of goodwill. Let us all endeavour to show love and share the little we have with our neighbours…