Nigerian billionaire Aliko Dangote has called on the government to crack down on oil theft, arguing that strong government action will help to mitigate the continued impact of low prices.
Speaking at the FT Africa summit in London, Africa’s richest man argued that Muhammadu Buhari’s government should prioritise a robust response to entrenched corruption alongside increased revenue collection.
“If government will try and block these holes and make sure they collect taxes, make sure they collect customs duties, we will be ok. We won’t have as much foreign exchange as before, but with managing supply and demand we will get there,” he said.
Dangote said that he had been encouraged by the actions taken by Buhari since his election in April, particularly his attempts at cracking down on corruption.
Buhari has prioritised reform at the Nigerian National Petroleum Corporation, the unwieldy state company which has gained a reputation for fraud and mismanagement. The government have replaced the senior ranks of NNPC’s leadership, hiring private sector expert Ibe Emmanuel Kachikwu.
“I’m very confident that the new government will be able to block loopholes because the President is very serious about it. By having him come into office we’ve had power improve by 18%. It depends on perception of leadership, the guy is no nonsense. He’s very determined to stamp out corruption… And Nigeria is a place where most of the people misbehaving are well known” he said.
Dangote said that the current decline in oil prices would have an impact on the economy, but argued that previous oil theft and corruption meant that the price Nigeria had been receiving for its oil had been less than expected for some time.
“We will have a short term shock. But I think people should also remember that Nigeria’s economy is very resilient. I know we’ve been selling oil at over $100 for the last 4 years, but at the same time within government operations we’ve been having leakages…it doesn’t mean we were capturing all of that $100.”
Also speaking at the summit, Wale Tinubu, chief executive of oil producer Oando, said that NNPC reform remained “absolutely critical”
“Successive governments have said they intend to reform NNPC but have failed. The NNPC must be made to function as a going concern… We don’t need any fancy loans, we need political will, probity and excellent management.”
Aliko Dangote speaks exclusively to African Business in our October issue, out now