Africa's richest man picks foreign deals as Nigeria losses money to Angola via the Dangote Refinery

Business Insider

a day ago

Hailed as a game-changer for Nigeria's energy sector, the $20 billion Dangote Refinery is currently at the center of a maritime dispute. African shipowners have expressed concern that the refinery is using ships from Angola to transport its crude and finished products, rather than Nigerian-owned vessels.
The Dangote Petroleum Refinery, worth $20 billion, is a major project in Nigeria's energy sector.
A maritime dispute has arisen due to the use of Angolan ships for transporting crude and finished products.
Nigerian shipowners cite a lack of local vessel capacity as a hurdle in participating in refinery transportation operations.
Ladi Olubowale, President of the African Shipowners Association in Nigeria, told the Punch that the Dangote Group's decision was driven by a scarcity of Nigerian vessels capable of managing such massive cargo operations.
'So I think the narrative about it is that the Dangote chartered most of the Angolan Fleet because they have vessels to be chartered, and we don't have.
We don't have a vessel of that size, such as Supermax, Suezmax, or Aframax vessels, among others, that could be used,' he stated.
'Like the Angolan people, they have vessels to be chartered. If we had it, it would have been an opportunity that Dangote would have used as well. We are losing a lot of money.
The benefits those guys are making, we are losing them. We are not even developing our capacity.
For every trade, there are three elements: the trade, the capacity, the currency, and also the cargo,' Olubowale further explained.
This development comes on the heels of rising dissatisfaction in Nigeria's local maritime industry.
According to Edward Sowho, a member of the Nigerian Indigenous Shipowners Association, while Nigerian vessels are not currently involved, arrangements can be made if Dangote demonstrates a commitment to local businesses.
'The vessels he is using in Angola may not belong essentially to Angolans; there is always an arrangement for you to get vessels from somewhere else to give to a third party.
For me, it is not enough of an excuse that there could be partnerships,' Sowho stated.
'If Dangote wants to use Nigerian-owned vessels, it is a matter of indicating interest. If he says I want to now confine myself to using Nigerian-flagged vessels in partnership with foreign owners, those things can be arranged.
If I were to own a refinery like that and I want to move crude oil, I would approach a group like NISA and say, I need this size of vessel to move cargo, and I am sure they can arrange it.
It's a question of I want to be indigenous and work with my people,' he elaborated.
In light of this conversation, the Dangote Group has upheld its position, noting that demonstrated capacity would be a key determinant when selecting business partners.
When contacted, spokesman Anthony Chiejine stated that the business will always work with shipowners who have the requisite capacity.
'He (Olubowale) is somebody in that business, and he has told you the challenges that they are facing. Ask the man in that sector why they are not attracting funding so that they can compete; that should be the question,' he said.
Similar accusations against Dangote last week
Last week, following a revelation by Aliko Dangote concerning local logistics problems, Olufemi Adewole, Executive Secretary of DAPPMAN, pointed out that most local merchants, especially small firms that depend on adaptable coastal supply networks, do not profit from Dangote's business practices.
'Since the advent of Dangote refinery, it has not been smooth sailing at all. We had preliminary meetings with their management.
We received promises and assurances that we would be accommodated. We are ready and still willing to patronise Dangote.
But the issue is, is Dangote ready to give us the product we want?' he stated. 'You don't get the price upfront,' Adewole explained.
'It is only after you've been cleared that a proforma invoice is issued. Meanwhile, there appears to be a select group Dangote prefers to trade with,' he added.
Aliko Dangote himself voiced frustration over the numerous challenges surrounding the refinery's operations.
According to the Nigerian billionaire, moving refined petroleum products from the Lekki plant costs Nigerian oil marketers more than procuring from offshore depots in adjacent countries like Togo.
Dangote ascribed the pricing gap to high port taxes, bureaucratic hurdles, and inefficiencies in Nigeria's regulatory structure.