The session featuring Patrick Pouyanné and Aliko Dangote at the just-concluded CEO Forum in Kigali is a tale of two worlds. On the one hand, there is the developmental tragedy of Africa facilitated by the collusion between African leaders and foreign investors with scavenging business models. On the other, there is a new aspiration that seeks an inward-looking approach to the growth process.
Pouyanné, the Chairman and CEO of a French multinational, TotalEnergies, is of the class of foreign investors who have confessed an enduring interest in growing with Africa. For decades, the company he heads has played a key role in African energy evolution – a journey many said has only succeeded in under-developing the continent.
On the other hand, Dangote is a breed of the new. Without benefiting from crude exploitation and its easy money, the richest African has invested in the largest single-train refinery in the world – a symbol of the historic call on the international oil companies (including Total Energies) to invest in Africa’s oil and gas value chain, which would bring about a more sustainable growth and capacity utilisation.
The interventions of both CEOs at the Kigali meeting also align with the two divergent growth ideologies – an entrenched outward-oriented view of development and the emerging inward-seeking expression that is rooted in getting Africans to shoulder the development with self-sourced resources.
With its company operating in about 30 countries both upstream and downstream, Pouyanné’s position at CEO dialogue is not different from the usual cliché foreign investors are known for. First, Pouyanné is excited about the African growing population – meaning a growing market where to sell finished products – which he described as “a good thing”.
In contrast, Dangote is excited about the fact that “the future is Africa”, a reason he is investing his “resources, soul and life” to make the continent great. For the Nigerian entrepreneur, who has invested massively in cement, agro-processing, oil refining, and other areas of the manufacturing value chain, Africa can become a manufacturing hub where value is created as opposed to the consumer of imported goods it currently is. In other words, Africa is a recharge card you must scratch to realise its usefulness.
TotalEnergies began operations in Nigeria as a pioneering oil firm in 1956, seven decades ago. Since then, the company which focuses on exploration and marketing, leaving out the most critical mid-stream where much of the economic impacts are created out of its business model, has created 1,600 jobs (self-declared). On the other hand, Dangote, without owning a single oil company, has built a 650,000 barrel-per-day capacity refinery that will create 135,000 direct jobs when it is fully operational. During its construction, Dangote discloses, 67,000 jobs were created.
According to Dangote, his company has invested over $25 billion in the past seven years to make Africa self-sufficient in fertilisers, refined oil products, and other commodities. He thinks exporting raw materials while importing the bi-products of the same commodities amounts to buying poverty and unemployment. Sadly, the fuel brought from TotalEnergies across Africa is imported from European refineries, which depend on feedstock from Africa – therein lies Africa’s walk to poverty. Today, its 1,443-kilometer underground oil pipeline between Uganda and Tanzania to ship oil to refineries in the United States, Europe, and Japan, has attracted outrage from environmentalists who claim the projects will endanger thousands of families.
Beyond the environmental concerns, there are also questions on why the company chooses to ship crude abroad for refining purposes (only for Africans to import the bi-products) instead of building refining capacity in Africa. The decision is not an isolated case. Cocoa beans are produced in Ghana, Côte d’Ivoire, and other West African countries to the Netherlands while the processed chocolates are shipped back to the continent for sale. Gold and many other commodities, whose prices are often fixed by the buying countries, follow a similar trajectory. This twisted route to development, Dangote says, can only be reversed by Africans and deliberate efforts by policymakers.
Indeed, the global commodity market is a tale of two worlds –predators and preys. How and why Africa, a continent that sits on 30 per cent of global mineral reserves, has remained the prey is a major research subject. Sometimes, the predatory nature of the market is blamed on poor leadership. Some other times, the conversation is on how crude capitalism and reliance on foreign capital have fuelled the underdevelopment of the continent.
Reversing the tragedy of underdevelopment
To change the tragedy of Africa’s hijacked development, it is all about leadership and making “the right decisions”, President William Ruto of Kenya told his colleagues at the presidential panel. But there is a trade-off between making the right decisions and popularity.
“When I make the right decision, people always tell me: you need to think about your re-election. And I tell them I was not elected to be re-elected. I was elected to reform Kenya… When I speak at some fora, people come to me to say: you should not speak too much. People may get angry with you…” Ruto said.
The Kenyan leader pointed at the full realisation of the African Continental Free Trade Area (AfCFTA) as a potential game-changer in the efforts to reverse the trend of history. In line with the popular argument – that you only achieve a single market agenda in Africa when Africans can move freely within the continent – the Kenyan President said free-visa entry should be on the table of all African governments as part of the inward-looking approach to growing the economy of African countries. Africa, he says, must strive for a win-win in its engagements with other continents and put off the victim mentality.
The CEO Forum chief host, President Paul Kagame, suggests that leadership also requires identifying the purpose of the existence of African countries and demanding that the Africans are respected by their “partners”.
Speaking on his experience with the United States and how Rwanda was excluded from the African Growth and Opportunity Act (AGOA) on account of its choice to heavily tax second-hand clothes and protect its infant industries, Kagame insists that Africa must reject what he described as “second-hand growth”.
Kagame says that there are failures Africa cannot blame others for. For instance, he wonders how African leaders intend to move on and succeed with AfCFTA if people are “not free” to move around. For him, it is not about whether African countries like themselves or not but an honest consideration of what they stand to gain from collaborations.
Clearly, Africa’s realisation of its potential depends on Africans making the right decisions and choosing mutually beneficial collaborations, going forward. The fact that TotalEnergies struck its first supply deal with Dangote Refinery, following a meeting between Pouyanné and Dangote, is a step in the right direction. It is an improvement on the current status quo where Africa outsources the value-addition process and imports finished products. However, to secure total control over its energy supplies, Africa must develop research and extraction capacity.
