— 30% interest rate killing Nigeria’s industrialisation — Nigeria may not see another refinery without industry protection — Reveals biggest business mistake, 6,920 jobs lost
By Juliet Umeh
President of Dangote Group, Aliko Dangote, has explained why petrol prices remain high in Nigeria despite the commencement of large-scale domestic refining, saying local production does not completely shield the country from prevailing global crude oil prices and market disruptions.
Dangote spoke in an interview with Arise Television on Tuesday.
He said his refinery buys crude at prevailing international market prices and sometimes pays significant premiums, making it difficult to sell refined petroleum products below sustainable market levels.
Responding to concerns over petrol prices, the businessman said the description of fuel as expensive was relative, noting that petrol remained more expensive in neighbouring countries.
He said: “There is still a lot of smuggling of the same petrol we are producing to our neighbouring countries because those neighbouring countries are about 30 percent to 50 percent more expensive than Nigeria.”
Dangote disclosed that the refinery bought crude at as much as $124 per barrel in May, adding that it could not subsidise the cost of fuel indefinitely.
“We can’t go now and subsidise everything,” he said.
He, however, assured Nigerians that the refinery would continue to meet domestic demand.
“Nigerians don’t need to worry. There will not be any shortage from our own part. There will not be any queues, and we’ll make sure that we keep satisfying the market despite all odds,” he said.
30% interest rate threatens industrialisation
Turning to Nigeria’s industrialisation challenges, Dangote identified high borrowing costs as a major obstacle to investment and expansion.
“It is very difficult to industrialise with interest rates at 30 percent. I can’t see the magician who can actually industrialise a country with 30 percent interest cost,” he said.
He warned that Nigeria might struggle to attract another major refinery investment without deliberate policies to protect domestic industries.
“Under the current things that are going on, especially downstream, I cannot see any new refinery in our lifetime,” Dangote said.
He argued that the government must protect productive domestic industries if it expects businesses to create jobs, generate taxes and deepen economic activities.
“If you import, what you are doing is that you are importing poverty and exporting jobs that you are supposed to create out of the country,” he said.
Dangote also identified inconsistent government policies and inadequate electricity supply as persistent challenges to manufacturing.
“You cannot manufacture goods with diesel,” he said.
Textiles was my biggest mistake — Dangote
Reflecting on his decades in business, Dangote identified his investment in the textile industry as his biggest business mistake.
“My biggest business mistake was textiles,” he said.
He explained that the business eventually collapsed amid what he described as inadequate policy protection and dumping by foreign manufacturers.
“We were swamped by Chinese dumping and Indian dumping. So eventually we had to close down,” he said.
The closure, he added, came with significant job losses, particularly at Nigerian Textile Mills in Ikeja.
Dangote disclosed that almost 8,000 workers were laid off across the business, including 6,920 employees of Nigerian Textile Mills in Ikeja.
“We laid off a total of almost 8,000 workers — 6,920 workers from Nigerian Textile Mills here in Ikeja alone,” he said.
He said the experience taught him an important lesson: that future investments must be structured to remain viable even when government protection is eventually withdrawn.
