Aliko Dangote, the billionaire industrialist and owner of the Dangote Refinery, recently stirred the pot in Nigeria’s economic discourse by claiming that the country’s petrol prices are unsustainable compared to those of Saudi Arabia, another oil-producing nation. Dangote pointed out that Nigeria’s fuel prices are around 40% cheaper than Saudi Arabia’s, a situation he deemed “illogical” and unsustainable. While his observations raise valid concerns about Nigeria’s subsidy regime, they also expose the complexities of making direct comparisons between Nigeria and Saudi Arabia, two vastly different countries in terms of governance, economic structure, social policies, and the handling of corruption.
This article aims to critically analyze Dangote’s assertion by exploring whether it is fair, accurate, or even relevant to compare Nigeria with Saudi Arabia. Furthermore, we’ll delve into the deep-rooted issues of corruption, inefficiency, and governance failures that have plagued Nigeria, rendering any direct comparison with Saudi Arabia not just misleading but also potentially harmful in understanding the true nature of Nigeria’s challenges.
The Illusory Comparison: Nigeria vs. Saudi Arabia
At first glance, Dangote’s comparison seems logical—both Nigeria and Saudi Arabia are major oil-producing countries, and both have historically offered subsidized fuel prices to their citizens. However, the similarities largely end there. A closer look reveals that Nigeria and Saudi Arabia operate under vastly different socio-political and economic systems, making any straightforward comparison problematic at best.
Saudi Arabia, a wealthy kingdom with a relatively small population compared to its oil wealth, enjoys a higher per capita income, advanced infrastructure, and a robust state apparatus capable of implementing policies efficiently. The Saudi government has historically used its oil wealth to develop its infrastructure, healthcare, education, and social services, and while corruption certainly exists, it is not institutionalized in the way it is in Nigeria.
On the other hand, Nigeria, with its larger population, has struggled to translate its oil wealth into tangible benefits for its citizens. Despite being Africa’s largest oil producer, the country has suffered from decades of mismanagement, corruption, and policy inconsistencies that have prevented it from maximizing the potential of its resources. It is a country where corruption has become so entrenched that it affects every level of government and public service, resulting in an unending cycle of poverty, infrastructural decay, and social inequality.
The stark difference in governance and economic management between the two countries means that comparing Nigeria’s fuel prices to Saudi Arabia’s is like comparing apples and oranges. Saudi Arabia’s fuel prices are part of a broader economic strategy that considers the nation’s wealth, infrastructure, and relatively low population. In contrast, Nigeria’s subsidy regime has evolved into a band-aid solution that hides deeper structural problems.
Corruption: The Elephant in the Room
To understand why Dangote’s comparison falls short, we must confront the elephant in the room: corruption. Saudi Arabia, despite its autocratic system, has mechanisms for accountability that have occasionally led to high-profile crackdowns on corruption. The Saudi government, under Crown Prince Mohammed bin Salman, has taken steps—albeit selectively—to curb corruption and ensure that state resources are managed more efficiently.
Nigeria, however, tells a different story. Corruption in Nigeria is not just a problem; it is an institution. It permeates every level of government and society, from the highest officeholders to the smallest bureaucratic processes. Successive Nigerian governments have failed to address the endemic corruption that drains the nation’s resources, leaving little room for meaningful economic reforms or the efficient implementation of policies.
The fuel subsidy system, in particular, has been a hotbed of corruption for years. While the official purpose of the subsidy is to keep fuel prices affordable for ordinary Nigerians, it has largely benefited a small group of wealthy individuals and companies that exploit the system for personal gain. Fuel importation is often riddled with fraud, with oil marketers, government officials, and even politicians colluding to inflate subsidy claims, siphon off funds, and engage in smuggling activities that deprive the nation of billions of dollars annually.
Dangote’s suggestion that Nigeria’s fuel prices should be comparable to Saudi Arabia’s ignores the fact that corruption has rendered Nigeria’s entire subsidy regime inefficient and unsustainable. If the government were genuinely committed to serving its citizens, it would have taken steps to eradicate corruption in the oil sector, ensuring that any subsidy truly benefits the people rather than enriching a select few. Until Nigeria addresses this endemic corruption, any discussion about fuel prices or subsidy removal will remain an exercise in futility.
A Government That Fails Its Citizens
One of the most glaring aspects of Dangote’s comments is the absence of any critique of the Nigerian government’s failure to prioritize the welfare of its citizens. Saudi Arabia, despite its autocratic rule, has invested heavily in public services, ensuring that its citizens enjoy a relatively high standard of living, with access to healthcare, education, and social services. The Saudi government has recognized the importance of using its oil wealth to build a more prosperous and equitable society.
Nigeria’s government, on the other hand, has consistently failed to prioritize the needs of its citizens. Despite generating billions of dollars in oil revenue over the years, Nigeria remains plagued by poor infrastructure, inadequate healthcare, failing educational systems, and widespread poverty. The government’s inability—or unwillingness—to address these issues reflects a deep-seated culture of negligence, impunity, and indifference.
Nepotism and favoritism have become the norm in Nigerian politics, with government contracts, appointments, and resources often allocated based on personal connections rather than merit or need. This has led to a situation where public funds are wasted on vanity projects, inflated contracts, and unnecessary expenditures, while millions of Nigerians struggle to access basic services.
In this context, Dangote’s call for the removal of fuel subsidies seems tone-deaf to the realities faced by ordinary Nigerians. While subsidy removal might make economic sense on paper, it is likely to exacerbate the hardships faced by citizens in a country where there is little trust in the government’s ability to use public funds effectively. Until the Nigerian government demonstrates a genuine commitment to transparency, accountability, and the welfare of its people, any attempt to remove subsidies will be seen as yet another example of the elite imposing their will on an already suffering population.
The Porous Borders and Fuel Smuggling Problem
Dangote also highlighted the issue of fuel smuggling across Nigeria’s porous borders as a reason why the current subsidy system is unsustainable. He noted that fuel prices in Nigeria are about 60% of what they are in neighboring countries, making it profitable for smugglers to buy subsidized fuel in Nigeria and sell it at higher prices elsewhere. This, he argued, makes the subsidy regime economically unsustainable.
While this observation is valid, it again points to a failure of governance rather than an inherent problem with subsidies. The Nigerian government has long known about the smuggling problem, yet it has failed to implement effective border control measures to address it. Instead of tackling the root cause, successive governments have allowed the problem to fester, turning a blind eye to the illicit activities that deprive the nation of valuable resources.
If the government were serious about addressing this issue, it would have invested in modernizing customs operations, enhancing border security, and deploying technology to monitor and track fuel distribution. These measures would help curb smuggling, ensuring that subsidized fuel reaches the intended beneficiaries—ordinary Nigerians—rather than lining the pockets of criminals and corrupt officials.
Is Subsidy Removal the Solution?
Dangote argues that the removal of fuel subsidies is inevitable and that Nigeria must follow the global trend of allowing market forces to determine fuel prices. However, this perspective fails to consider the unique socio-economic context of Nigeria, where millions of people live in poverty and rely on subsidized fuel to survive. Abruptly removing subsidies without implementing alternative social safety nets or mechanisms to cushion the impact would be disastrous for the most vulnerable members of society.
A more responsible approach would be to gradually phase out subsidies while simultaneously investing in public infrastructure, healthcare, education, and social welfare programs. The government must demonstrate that it can be trusted to use the funds saved from subsidy removal to benefit the public, rather than enriching a select few. This would require a level of transparency, accountability, and good governance that has been sorely lacking in Nigeria for decades.
Dangote’s Position: Self-Interest or Genuine Concern?
It’s also worth scrutinizing Dangote’s position on this issue. As the owner of the Dangote Refinery, which is poised to become the largest in Africa, Dangote stands to benefit enormously from the removal of fuel subsidies. If Nigeria’s government allows fuel prices to be determined by market forces, Dangote’s refinery would be in a prime position to dominate the market, potentially driving up prices and maximizing profits.
While Dangote’s investment in the refinery is commendable and has the potential to reduce Nigeria’s dependence on imported fuel, it’s important to question whether his advocacy for subsidy removal is motivated by genuine concern for Nigeria’s economic health or by the prospect of increased profits for his business empire.
Conclusion: The Need for a Holistic Approach
Dangote’s call for fuel subsidy removal, and his comparison with Saudi Arabia, oversimplifies a complex issue that requires a more nuanced understanding of Nigeria’s unique challenges. The reality is that Nigeria’s fuel subsidy problem is not just about economics; it’s about corruption, governance failures, and a government that has consistently failed to prioritize the welfare of its citizens.
If Nigeria is to address the subsidy issue effectively, it must first tackle the root causes of corruption, inefficiency, and negligence that have prevented it from maximizing its oil wealth. The government must invest in infrastructure, healthcare, education, and social welfare, ensuring that any savings from subsidy removal are used to improve the lives of ordinary Nigerians. Only then can Nigeria hope to achieve the kind of economic transformation that Dangote envisions.
Until then, comparing Nigeria with Saudi Arabia is not only misleading but
also detracts from the urgent need to address the deeper systemic issues that have kept Nigeria trapped in a cycle of poverty, corruption, and inefficiency. The path to sustainable economic growth lies not in following the example of other nations, but in building a Nigeria that serves the needs and aspirations of all its people.
Reference
Petrol price 40% cheaper in Nigeria than Saudi Arabia doesn’t make sense — Dangote published in Tribuneonlineng