By Bolanle BOLAWOLE
turnpot@gmail.com 0705 263 1058
When two elephants fight, the grass, they say, suffers. But when cabals fight, and fight dirty like the NNPC and Aliko Dangote are doing, what happens? Dogs eat dogs and chickens gnaw at each other’s intestines. Can of worms explode in the open and cupboards full of skeletons, hitherto securely locked, are forced open. For instance, Dangote alleged that his refinery was being sabotaged by oil cabals bent on the continued importation of refined petroleum products. NNPC countered that the said refinery was not yet completed and certified and that its products were inferior to imported stuff. Dangote has fired back with his Malta oil-blending allegation to support his claim that well-heeled personalities want to continue to make a killing with fuel importation at the expense of hapless Nigerians. Understandably, the stakes are high. A single write-up cannot perfectly put all the pieces together. Call it a maze, labyrinth or jig-saw puzzle and you will be right. So, here today, we take a look at some of the information available and allow our readers a better understanding of the issues at stake.
STORY NUMBER 1:
In 2023, Dangote had a meeting with his select strategists for the purpose of deciding who, among Peter Obi, Atiku Abubakar, and Bola Ahmed Tinubu he should back in the February 2023 presidential election. After analyzing each candidate’s profile, merits, and demerits, the consensus was that Atiku was the best option to back.
Dangote made donations as well to Tinubu’s campaign but his body language showed he preferred Atiku… His business arch rival, Abdul Samad Rabiu of BUA Cement, pitched his tent with Tinubu and did not donate money to Atiku .Rabiu’s support was so personal that he donated his private jets for use by TInubu’s campaign team. The same is said of Tony Elumelu who reportedly provided the much-needed cash for Tinubu’s camp during the ill-fated cash crunch and scarcity before the election. No wonder Tony was the first person Tinubu visited in Lagos as president-elect!
That Dangote did not support him was one of the reasons why Asiwaju stayed away when Dangote Refinery was later commissioned by Buhari. The election is over. Asiwaju is the president and the chicken has come home to roost. For the first time since the return to democracy in 1999, Dangote is not the favourite of a sitting government. Rabiu and Elumelu have taken his position. The biggest casualty from the politics of Dangote is his 650,000 barrels per day Dangote Refinery.
Before Asiwaju, Dangote had an agreement with NNPC that it would invest $2 billion in Dangote refinery or, if it cannot invest in cash, it would provide crude oil worth that amount for Dangote refinery to process. This investment will give NNPC a 20% stake in the Dangote refinery. NNPC is too broke to drop $2 billion, so it chose to provide $2 billion worth of crude oil in lieu of cash. But there is a problem: Buhari, who was the president when the deal was sealed, is no longer in power. The new Whiz kid is not a fan of Dangote any more; so the NNPC guys read the body language… NNPC, which was at the mercy of Dangote when Buhari was in charge, turned to hard nuts to crack under Tinubu.
This government is also investigating forex allocations made to Dangote when Godwin Emefiele was the CBN governor.
STORY NUMBER 2:
By Taiwo Olanegan: I did not believe it when I heard that the Dangote refinery’s capacity is 650,000 barrels of oil per day. Where would the billionaire get that feed stock (crude oil) volume? Is he going to lay pipes from Escravos to Lagos? At that time, our production figure was 1.8m bpd. Would the lOC agree to sell 30% of production volume to Dangote? Where will he get the forex to buy such? And which market would receive his refined products, knowing that the FG was frenetic about making Warri and Port Harcourt refineries to work?
The oil industry is a global cartel… Nigeria’s age-long economic and security challenges are not far from the yo-yo and high-level manipulations in the global oil industry. These intrigues are intentional, international, and sometimes wicked in every sense of the word. That’s why, since 1999, almost all our presidents have added the ministerial supervision of NNPC to their job.
Oil politics is ballistic… When I gave an opinion that the recent cement scarcity and price hike was a war between Tinubu’s Kitchen Cabinet and the Dangote Group, folks shouted at me. Cement price is still high in spite of pleadings and threats by the new government. It was a battle Dangote won. But he is not going to win this new war. The powers-that-be and the international oil players are bigger and more experienced than Dangote. His romantic seasons with Goodluck Jonathan and Buhari are over! Dangote’s trade history, his file and use of forex allocated by Godwin Emefiele are with the government. This is a presidency headed by a man who knows some accounting. The figures are suspicious. Dangote would have been arraigned with Emefiele after the EFCC made attempts but the optics would be terrible for him and the government. So the government chose to put a pedal on it. However, a 650,000 bpd refinery is too large a plate for a person. How can only one fellow own a refinery that could cover the petrol needs of West Africa? What happens when he goes into steel and oil exploration?
In the September 2013 edition of Harvard Business Review, the journal warned about the consequences of allowing Dangote to keep the major stake in the proposed refinery “as it would concentrate too much power in one man’s hand”… Antitrust laws, propaganda, and outright denial of feed stock and certifications will force Dangote to the negotiation table.
STORY NUMBER 3:
NNPC VS DANGOTE REFINERY: THOSE WHO TALK DON’T KNOW THE WHOLE TRUTH AND THOSE WHO KNOW THE TRUTH WON’T TALK
In May 2021 , NNPC went into marriage with Dangote Refinery (DR) by proposing to acquire 20% equity in DR. Early 2024, NNPC promised to supply crude to DR. In July 2024, Dangote alerted the public that NNPC did not own 20% in DR but 7.2%. In July 2024, Dangote accused the government of importing bad fuel into the country and that the International Oil Companies and internal forces were bent on sabotaging him. A week later, NNPC fired back that DR is not licensed and its fuel is inferior to the imported one. Hell was let loose.
What lessons can we learn? Dangote cannot complain about the system now. Why? The system has served him well in the last 30 years! The system made him emerge as the richest African alive. Dangote is a one-man cabal! But like DAEWOO in South Korea and the late MKO Abiola, you can be 99% correct in your political calculations but the day you are 1% wrong politically, the financial empire built through political connections and manipulations will face existential threat.
This is a big lesson: It is dangerous when you have a business that is government-dependent; even though it is the easiest way in developing countries to make MEGA money (the type that can put you on the FORBES list) through concessions, FX allocation preferential treatment, monopoly, direct printing of money by CBN and sharing of same among the elites, etc. Emefiele allegedly printed N30 trillion and a whopping 85% could not be accounted for or traced to any national projects, according to CBN auditors!
Dangote should sit down with NNPC and resolve issues amicably. Let him do what Bill Gates did when he was faced with similar huge opposition that threatened his survival. Gates divested from Microsoft – retained only 5% – and took his cash to electricity and health business. Immediately, peace returned. It is the way the world (of business) runs. Once the wealth of the nation resides in your house, peace eludes you! Ali Baba’s experience is also instructive here. Jack Ma, China’s richest man, said: “To get rich is glorious but among the richest men in China, only a few have a good ending!”
STORY NUMBER 4: WHY NIGERIA’S REFINERIES WILL NEVER WORK – Former President Olusegun Obasanjo
“When I was president, I invited Shell to a meeting. I told them I wanted to hand over the refineries for them to help us run. They bluntly told me they would not. I was shocked. I repeated the request and they stood their ground. When the meeting was over, I asked their big man (MD) to wait behind for a chat. Then I asked him why they were so hesitant about not taking over the refineries. He said did I want to hear the truth? I said yes. He listed four reasons. One, he said Shell makes its money from upstream and that is where its interest lies. Two, he said they only do downstream or retail as a matter of service. Three, he said our refineries would be bad business for them, that globally, companies are going for bigger refineries because of the economics of refineries. Four, he said there is too much corruption in refineries. I thanked him for his honesty. I knew we had a big problem in our hands. I had virtually given up hope on the refineries when God did a miracle. Aliko Dangote and Femi Otedola approached me and said they would be interested in buying two of the four refineries. They said they would buy 51 percent stake in Port Harcourt and Kaduna. I was over the moon. I said, finally, this burden would be taken off the neck of the government. They offered $761 million and paid in two installments. Unfortunately, Umaru (President Yar’Adua) canceled the sale and returned the refineries to NNPC. Today, we are still where we were. Someone told me Tinubu said the refineries would work by December. I told the person the refineries would not work. This is based on the information I received from Shell when I was the president”.
STORY NUMBER 5: “Dangote now feels what Nigerians with no government connections are going through in doing business”, activist Aisha Yesufu.
STORY NUMBER 6: NIGERIA’S ONE AND ONLY GOAT IS PROVING TOO DIFFICULT FOR DANGOTE’S SNAKE TO SWALLOW:
Dangote wanted to take over NNPC assets at the dying hours of Obasanjo’s administration but President Yar’Adua thought it was not proper to hand over the nation’s assets to two individuals who wanted to buy them as scraps. Consequently, the contract was scrapped by Yar’Adua. Buhari/Emefiele came in and provided ENOUGH OXYGEN for Dangote to “complete” his own refinery and even pay 70% of his loan on a factory that was yet to refine one litre of gasoline! It was commissioned by Buhari even when it was not ready!
Meanwhile, Buhari had made substantial forward oil sales that would prevent Dangote from getting crude without breaking existing contracts. Apparently, all is not well with that project ab initio. It seems what took Dangote to the top can no longer sustain him there: i.e. MONOPOLY. IOCs, NNPC, CBN. In 100/100 circumstances, MONOPOLY is injurious to the health of any national economy.
OLIGOPOLY is a state policy in South Korea; the State deliberately empowered some individuals like DAEWOO, SAMSUNG to create wealth. But the rule of LAW is SACROSANCT. DAEWOO, once the richest South Korean, ended in jail when he broke the law. The CEO of Samsung was sent to jail recently for breaking the law. That’s why Jack Ma (Ali Baba), China’s richest man, also ran into trouble in China. That’s why Google and Microsoft ran into trouble in the West. Monopolists (ALL OF THEM ) build their wealth through unfair exploitation of the Commonwealth…
Nigeria’s OIL BUSINESS belongs to 220 million Nigerians: It is not just a BIG GOAT but Nigeria’s ONLY GOAT. NNPC probably has realized the full implications and that’s why they refused to pay up their counterpart funding to acquire 20% equity as earlier agreed. What should Dangote do in this circumstance? He should come out publicly and sell at least 49.5% equity to Nigerians in a transparent manner. Only he can’t swallow Nigeria’s only goat, it will CHOKE him! Even in Saudi Arabia, ARAMCO was sold to the whole world and the Saudi government became better thereafter.
STORY NUMBER 7:
I don’t think it’s in anyone’s place to advise Dangote to sell his business to the public. It is inflated and, therefore, he should keep it to himself but he should not be allowed to monopolize our common patrimony. According to experts, a 650,000 barrels per day refinery should not cost more than $8b but he claims he built it for $19b. So, where do we start the discussion if he wants to sell to the public? It’s a single train refinery. If something goes wrong somewhere, the whole plant shuts down.
What can we make of the above and where will it all end? I am sure you know the last has not been said or heard on this rofo-rofo fight. Allegations and counter-allegations are still flying right, left, and centre. One thing is certain, though: Dangote must be right when he said the oil cartel is far more vicious than the drug cartel. And wherever any of these cartels fight dirty, like they are doing here now, God save the nation!
- Former Editor of PUNCH newspapers, Chairman of its Editorial Board and Deputy Editor-in-chief, BOLAWOLE was also the Managing Director/ Editor-in-chief of THE WESTERNER newsmagazine. He writes the ON THE LORD’S DAY column in the Sunday Tribune and TREASURES column in New Telegraph newspaper on Wednesdays. He is also a public affairs analyst on radio and television.