Private Investment, Energy Governance, and Macroeconomic Resilience in Africa: The Dangote Refinery Case
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Abdalla Eltom MOHAMED Department of Economics, Islamic, University of Madinah, Madinah, Saudi Arabia
This paper examines the political-economy mechanisms through which refined-petroleum import dependence has persisted in Nigeria despite substantial domestic crude-oil production, and how a specific configuration of regulatory reform, market-pricing mechanisms, and public-private coordination may have enabled the emergence of large-scale private domestic refining capacity. Employing a theory-developing case-study design that combines process tracing and comparative plausibility probes, the paper introduces the concept of the downstream resource curse, a self-reinforcing equilibrium in which petroleum-import dependency generates import-licensing, fuel-subsidy, and foreign-exchange rents whose beneficiaries resist domestic refining investment. The Dangote Petroleum Refinery ($19 billion; 650,000 barrels per day) is analysed as an important deviant case. Two external disruption episodes, Strait of Hormuz disruptions and the COVID-19 supply-chain crisis, are used as illustrative stress-tests. Plausibility probes are conducted for Angola, Ghana, and Kenya.
The paper proposes a five-element energy sovereignty policy framework linking theoretical mechanisms to governance prescriptions. The findings suggest that domestic refining capacity may contribute to macroeconomic resilience by reducing foreign-exchange exposure and supply-chain vulnerability, with implications for energy-governance reform across African petroleum economies.
© The Author(s) 2026. Published by RITHA Publishing. This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited maintaining attribution to the author(s) and the title of the work, journal citation and URL DOI.
Article’s history: Received 24th of June, 2026; Revised 2nd of August, 2026; Accepted for publication 19th of August, 2026; Available online: 24th of August, 2026; Published as research article in Volume II, Issue 2(4), 2026.
Mohamed, A. E., & Adamu, A. (2026). Private investment, energy governance, and macroeconomic resilience in Africa: The Dangote Refinery Case. Applied Journal of Economics, Law and Governance, Volume II, Issue 2(4), 207 - 219. https://doi.org/10.57017/ajelg.v2.i2(4).02
CRediT Authorship Contribution Statement: Mohamed, A. E.: Conceptualization; Supervision; Validation; Writing – review and editing; Resources. Adamu, A: Conceptualization; Data curation; Formal analysis; Investigation; Methodology; Validation; Visualization; Writing – original draft; Writing – review and editing.
Acknowledgements: The authors thank colleagues at the Institute of Public Administration, Riyadh, and the Department of Economics, Islamic University of Madinah, for professional engagement that informed several policy arguments in this paper.
Conflict of Interest Statement: The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
Data Availability Statement: All data supporting this study are derived from publicly available sources: the Central Bank of Nigeria Statistical Bulletin (www.cbn.gov.ng); NNPC Ltd. Monthly Operations Reports (www.nnpcgroup.com); National Bureau of Statistics Nigeria (www.nigerianstat.gov.ng); U.S. Energy Information Administration (www.eia.gov); African Development Bank Open Data Portal (www.afdb.org); UN Comtrade (comtradeplus.un.org). Figures drawn from Dangote Group investor communications are treated as indicative pending independent audit, as stated in the text. No proprietary datasets were generated.
Ethical Approval Statement: This study is theoretical and conceptual in nature and did not involve human participants, personal data, or animal subjects. Therefore, ethical approval was not required.
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