Since independence, the economic model for most African countries has largely rested on exporting their considerable resources in the raw state, while importing finished products fashioned out of those same raw materials. In practical terms this has meant that value from Africa's resources is captured elsewhere, along with the growth, jobs, technology and industrial capacity that could have come from processing the continent's resources locally.
Nigeria offers one of the starkest examples of the downsides of this approach. Despite being the continent's largest oil producer, Nigeria has for years been its largest importer of refined petroleum products, exporting crude oil only to buy back petrol, diesel and aviation fuel at far higher prices. This was the cycle that the Dangote Group sought to break by building a refinery with 650,000 barrels per day capacity in Lagos, Nigeria's commercial capital.
Breaking that pattern required more than ambition and technical expertise. It demanded enormous financial backing, long-term confidence and institutions willing to support such a project. That role fell to the African Export-Impact Bank (Afreximbank), which has provided close to $10bn in financing since the project's inception.
Aliko Dangote, chief executive officer of Dangote Group, lays out the logic behind the project. "We don't want to be taking our raw materials out for someone to process them and bring them back and for us to pay 12 or 15 times the price." Exporting raw materials and importing finished products, he has pointed out, essentially means exporting wealth and importing poverty.
Originally published by African Business.