Dangote Shuts Two Companies, Blames Fuel Subsidy Mafia

LAGOS — Africa’s richest man, Aliko Dangote, has shut down two of his companies and pointed to what he calls a powerful fuel subsidy mafia working to undermine his refinery project. Dangote made the disclosure in a statement released on Saturday.

Dangote said he closed his flour and textile businesses due to foreign exchange challenges that made operations unsustainable. He said the same economic forces that hurt smaller businesses are now being weaponised against his refinery.

“There are powerful interests who do not want this refinery to succeed. They benefited from the old system of fuel imports and subsidies. They are fighting back,” Dangote said in the statement.

The Dangote Petroleum Refinery has been a major driver of Nigeria’s recent economic improvements. S&P Global cited the facility’s impact in its credit rating upgrade of Nigeria on Friday. The refinery now operates close to its full capacity of 650,000 barrels per day.

The Subsidy Battle

Nigeria removed its costly fuel subsidy in 2023 under President Tinubu. For decades, the subsidy cost the government hundreds of billions of naira annually. It also created a system that favoured fuel importers at the expense of domestic refining.

Furthermore, the removal of the subsidy gave local refiners like Dangote a competitive opening. However, Dangote says vested interests have pushed back hard. He says these groups spread misinformation and try to manipulate government policy to protect their import businesses.

The Dangote Group has reported several disputes with Nigerian regulatory agencies over pricing, access to crude oil, and import approvals. Dangote has previously gone public with complaints about what he described as unfair treatment by some government agencies.

Impact on the Economy

The shutting of the two companies raises concerns about Nigeria’s business environment. Analysts say even the country’s most powerful industrialist is not immune from the structural problems that drive companies out of Nigeria.

However, market observers say the refinery itself remains on track. Dangote said the refinery’s operations will not be affected by the closure of the other businesses. He said he remains committed to making the facility a long-term driver of Nigeria’s economic independence.

The federal government has not publicly responded to Dangote’s claims about the fuel subsidy mafia. The Ministry of Petroleum Resources has previously said it supports the development of domestic refining capacity as a national priority.