Nigerian billionaire and industrialist Aliko Dangote has raised a serious concern that Africa may never witness the construction of new large-scale oil refineries unless entrenched rent-seeking behaviors in the petroleum sector are decisively tackled through strong political will. Speaking at the Global Commodity Insights Conference on West African Refined Fuel Markets, Dangote identified the Lomé Floating Storage Terminal off the coast of Togo as a key obstacle to Africa's refining ambitions.
The terminal, controlled by powerful international trading firms, holds over two million tonnes of petroleum products and serves as a major import fuel storage site, undermining local refining capacity by promoting a system that thrives on imported fuel dependency and inflated prices.
Dangote explained that this entrenched rent-seeking system in the petroleum value chain has historically fostered corruption and blocks new refiners from entering the market, as these powerful interests resist disruptions to their profits. He emphasized that without cohesive policy alignment, regional cooperation, and especially decisive political intervention, no major refinery project would succeed in sub-Saharan Africa during his lifetime or that of many industry stakeholders.
The Dangote Refinery in Lagos, currently undergoing capacity expansion, remains an exception in the region but faces systemic challenges that threaten to stifle replication across the continent.
This stark warning underlines the urgent need for political reforms and coordinated efforts in Africa’s oil sector to break rent-seeking monopolies and foster sustainable industrial development. Until such reforms are made, the continent’s goal of refining self-sufficiency and energy independence will remain elusive.
