I smile: “The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has once again raised concerns over the growing influence of the Dangote Refinery in Nigeria’s downstream petroleum sector, warning that the company’s forward integration strategy could lead to monopolistic control, threaten thousands of jobs, and cripple small players across the fuel value chain.
“On June 15, Dangote Refinery announced it would begin nationwide distribution of diesel and premium motor spirit (PMS), commonly known as petrol, starting August 15. With a daily refining capacity of 650,000 barrels, it is the largest refinery in sub-Saharan Africa, and many had initially welcomed the move as a long-awaited breakthrough in Nigeria’s fuel-sufficiency efforts.”
The wailing has started. Before you know it, no one will remember how bad it was before Dangote Refinery was born. Yes, a monopolistic has received the refining sector from the gods of Nigeria, free! Nothing like that: Nigeria needs efficient supply chain and competition is the only way to make that happen since the governments at all levels are severely underfunded to deliver platforms of commerce.
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Every economy needs big companies especially when governments do not show up. Before the Central Bank of Nigeria had its mojo, the First Bank of Nigeria acted as banks’ bank, clearing cheques for other banks, with the same authority you would have expected from an apex bank.
What the government should focus on is creating smart regulations and not going after big companies. Think of it: before CBN had zonal offices, First Bank ran the zones but was required to support other banks. And First Bank did and everyone was fine.
So, as Dangote expands, we can ask it to open its networks so that qualified trucks can participate, making sure those who want to work stay at work. But we must not be intimidated by associations. Nigeria needs railway investors, postal system investors and broad investors in platforms of commerce for the economy to have any chance, as you need those investors for entrepreneurs to plant companies on them.
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