Aliko Dangote fears global oil volatility will force Nigerians into reduced work days

…Says it may complicate Nigeria’s debt profile 

Aliko Dangote, Dangote Group president, said on Monday that he fears the current high cost of fuel resulting from the Middle East crisis will create more hardship for Nigerians unless the situation de-escalates soon. Dangote said this while fielding questions from State House journalists after meeting President Bola Tinubu for an Eid-el-Fitr homage on Monday in Lagos.

​Dangote had earlier responded to the volatility in the global crude oil market by reducing the cost of products from his refinery as part of measures to ease the hardship. The price of one litre of petrol sold for about N850 before the war, rising to the current price of N1,360 against the backdrop of rising crude oil prices in the global market.

​Fuel costs drive transportation surge

​The high cost of fuel has also pushed the cost of transport up by between 50% and 80% in some parts of the country. While Dangote did not indicate what future prices would look like if the war continues, he warned that people may be forced to work fewer days if the crisis persists.

Read also: How the US/Iran war is impacting Nigerias labour market 

​He noted that the Middle East war means a great deal for Nigerians. “We don’t have much to do with it. But, you know, the world is a global village and it definitely will affect us. We pray this situation will be sorted out and I hope that it is not going to escalate further, because if it doesn’t de-escalate, we’ll end up paying big prices,” he said.

​Africa faces worsening debt burden

​He also expressed fear that the crisis may further worsen Africa’s debt burden. “Africans are very busy paying debts and putting this again on top of us is going to add a lot of hardship on people and on the government, for something that we have no real involvement in,” Dangote said.

​”When you talk about energy, energy affects almost everything and people will try to take advantage of the opportunity to make money. If this war doesn’t de-escalate it is going to keep pushing prices up and governments cannot really now go and add salaries also, so people will really, really feel the pain,” he added.

​Informal sector at risk

​He particularly expressed fears for people in the informal sector, such as barbers and bread bakers, as well as industrialists who must use their own generators. “You can see in some countries today what they’ve done; they ask everybody to work from home because they cannot bear the cost.
​”I think in countries like Indonesia, people only go to work four days a week and they will look at the situation; if it doesn’t improve they will ask everybody not to go to work anymore. They may resort to the situation where more people will work from home,” he said.

​Call for collective prayer

​”So, I pray and we all need to pray that this thing de-escalates. If it doesn’t de-escalate, you know normally we in Africa we don’t have much savings and people normally go out and look for money for the next day or even the same day. For some of them, if they don’t work that day, they will not eat,” he added.
​Speaking on his visit, he disclosed that he visited the president to wish him Eid Mubarak. “I haven’t seen him for a while and, you know, wish him all the very best and pay my respect. That’s what the visit is all about,” he said.

​Confidence in Nigerian infrastructure

​Dangote also applauded the president’s recent engagements in the UK, adding that it has opened ways for more investments in Nigeria. “Today diplomacy without the economic part of it is not complete. So I believe his visit will open quite a lot of doors and you can see the agreement that was made,” he said.

​He sees the success as a sign that Nigeria will improve its infrastructure, especially in the ports, following the £746m Lagos Ports rehabilitation. “That’s quite a lot; it is not that easy dealing with the British, getting this kind of money out of them. They, too, are struggling on their own. But I think this is to show confidence. It’s not about the money. It’s about the confidence in Nigeria,” he said.