Please join us for a panel discussion with our distinguished panellists, Professors Victor Oguejiofor Okafor, Mobolaji Ebenezer Aluko, John Onyeukwu, Jibrin Ibrahim, Ehiedu Goodluck Iweriebor, and Owei Lakemfa, who will be sharing their expertise on “Dangote, Oil and Power in Nigeria.”

IT is no secret that Nigeria’s economy is mainly dependent on crude oil, which is why there is so much buzz in the oil and gas industry. According to Naijaonpoint, crude oil accounted for about 82.5% of Nigeria’s total exports in the third quarter of 2023. This statistic alone explains the role oil plays in local and international politics. It is a common notion in Nigeria that oil is not just a source of income, as the nation’s economy is built on it. For a long time now, oil has chiefly dictated the flow and rhythm of Nigeria’s economic development, which is why control of oil resources is a significant determinant of the country’s power dynamics. It is no secret that Saudi Arabia, Russia, and the United States make up a consortium of nations that rake in billions through the export of oil. With that revenue, it is undeniable that these players influence national and international policy. As Africa’s largest oil producer, Nigeria’s economy is thus linked to the ebbs and flows of the world oil market.

Nigeria has three government-owned refineries in Kaduna, Warri, and Port Harcourt, and the Dangote Refinery was commissioned on May 22, 2023. The state refineries had suffered for decades of neglect, corruption, and mismanagement before then. The refineries operated below capacity. They produced less than 10% of their capacity most of the time despite a series of government interventions and rehabilitation efforts, with no or minimal improvement. The commissioning of the Dangote Refinery has thus come with a new dawn of hope, of being able to be self-sufficient in finished petroleum products, creation of employment and foreign exchange savings, and an expectation for an end to fuel shortages and importation, and taking Nigeria to be a net exporter of finished products in the near future.

The first discovery of crude oil in Nigeria was at Oloibiri, Bayelsa State, in 1956, and ever since, Nigeria’s economy and politics have been built on the oil and gas sector. The economic implications of this discovery are that the Nigerian government now relies on petroleum exports to fund national budgets and infrastructure. This significant dependence on oil has, however, been both a blessing and a curse. Nowadays, petroleum institutions such as the Nigerian National Petroleum Company (NNPC) serve as political instruments for politicians rather than fulfilling their primary commercial duties. This is the exact reason fuel subsidies become a primary agenda in political manifestos—subsidies have evolved into a significant tool for political manipulation, used to drain the nation’s treasury while enriching a few elites. In this context, Dangote’s establishment may challenge the entrenched interests of the elitist ideology and force a rethink and reutilization of oil, power, and policy in Africa’s largest economy.

Adam Smith’s spirit of capitalism was resurrected in Nigeria in 2024, when the Dangote Refinery began full operations. The Refinery, valued at about $19 billion, is projected to process 650,000 barrels of crude oil per day. Nevertheless, this new dawn had also arrived with its own storm—monopoly. One of the most recurring arguments by critics is that Dangote’s vast establishments, including sugar, cement, and now petroleum, create space for the centralisation of economic power, thereby submitting a nation’s destiny to a modern capitalist. In a country like Nigeria, where corporate and political interests often overlap, can Dangote’s new large-scale project thrive without some level of state partnership, given the failures of the government-owned refineries? As it stands, Dangote’s current success is an exposure to the efficiency of capitalism over bureaucracy-infected governmental processes. However, questions remain about whether this private dominance will genuinely serve national interests or replicate the same structural inequalities that have defined Nigeria’s oil politics for decades.

Over the years, it has been an embarrassing irony that Africa’s largest oil producer imports most of its refined fuel. Hence, Dangote’s Refinery is the only hope for now to transform Nigeria from a net importer of petroleum into a self-reliant, or even exporting, nation, and, if properly managed, could become a catalyst for industrial rebirth and energy security. According to Dangote, the refinery’s mission is to produce enough petrol, diesel, and aviation fuel to keep local demand and even support neighbouring countries. This vision could save a serious nation billions of dollars annually and reduce the never-ending pressure on foreign exchange reserves, thereby stabilising the naira. Apart from other economic benefits of this establishment, such as creating job opportunities and boosting the manufacturing sector, the nation may also attract foreign investors as a regional energy hub. Nevertheless, government policies and regulations have a significant impact on Nigeria’s economic rebirth.

Even though Dangote promised a light at the end of the tunnel, the current challenges faced by the refinery are beyond technical support. Nigeria’s policy ecosystem has not been outrightly favorable to the firm. This is unarguably the status quo in an industry where frequent shifts in fuel pricing, subsidy policies, and foreign exchange regulations create uncertainty for investors. The outcome of this can be ascertained by simple logic: if the refinery must succeed, it needs the government’s utmost support. The problem the refinery currently faces is a political one, and only political powers can solve it. The project has stirred unease among entrenched interests that have long benefited from fuel importation and subsidy payments. These groups view the refinery’s success as a threat to their control over lucrative supply chains. There are also growing concerns about the perilous state of Nigeria’s infrastructure, including a poor road network and electricity supply, which have been affecting production at the refinery.

Considering these in-the-trenches issues, it is difficult not to question whether a single private refinery will succeed in an environment where politics rules economics. The success of the Dangote Refinery, and of Nigerian industrial dreams in general, hinges importantly on the government’s capacity to establish an enabling environment—one that values efficiency over patronage and long-term growth over political expediency. For many decades, the Nigerian oil sector has been greatly politicised, ranging from fuel subsidy issues to biased allocation of crude supply and import permits. An intervention is most likely to deter private investors and distort market competition. Beyond professed openness may be offset by political agendas stemming from bureaucratic congestion, policy contradictions, and price concerns that limit profitability at the refinery, if that is the situation. If Nigeria can unshackle industrial growth from politics of patronage through equitable policies, providing stable power supply, and free pricing, then the refinery will not only be a game changer in the petroleum sector but in the economy as a whole.

There is no doubt that the emergence of Dangote Refinery marks a critical shift in Nigeria’s economic landscape. It is a worthy investment, catapulting the country from long-term state dependence and inefficiency to a time where private individuals now redefine the normal. However, this transition comes with questions, as always. It questions the future of oil politics in an inconsistent global energy sector.

As the world inevitably transitions to renewable energy sources, Nigeria will be forced to manage and use its petroleum wealth appropriately and diversify its economy. With appropriate plans and proper policies, Dangote’s refinery could lead Nigeria’s industrial resurgence by providing the much-needed energy security and economic stability. This only digs deeper into the roots of oil and politics, as without the political will to implement transparent policies that safeguard competition and protect the interests of the masses, corruption will persist in the fluctuations in Nigeria’s sociopolitical problems. It is important to note that the refinery does not have the autonomy to reform the system, but it can at least serve as a signal of a new era. In the long term, Dangote’s feat is both symbolic and pragmatic, offering a glimpse of what Nigeria could be with the right systems and policies in place. Whether that dream lasts will depend solely on the country’s ability to convert this industrial feat into sustainable institutional reform.

Sunday, November 2, 2025

10 AM Austin

5 PM Nigeria

6 PM South Africa

Register Here:

https://www.tfinterviews.com/post/dangote

Join via Zoom:

https://us02web.zoom.us/j/84752093041