Will Africa become a new global center for industrial manufacturing in the future?

For mid- and low-end industries, Africa is certain to become the next industrial manufacturing hub after South Asia. In fact, Egypt and Morocco in North Africa have already emerged as regional industrial centers. Egypt’s exports of ready-made garments and chemical products are growing rapidly, while Morocco’s automobile production has surpassed that of South Africa, reaching an annual output of one million vehicles—including nearly 500,000 passenger cars. On a per capita basis, this level already matches China’s in 2012. Of course, North Africa’s situation cannot represent Africa as a whole: its industrialization began earlier and its overall development level far exceeds that of sub-Saharan Africa. Nevertheless, as sub-Saharan African countries gradually end their civil wars and attain social stability, they now have the opportunity for peaceful development—and in this era of globalization, they are boarding the ‘last train’ of industrialization. For a comprehensive overview of industrialization in sub-Saharan Africa, please refer to my article titled “Industrialization in Sub-Saharan Africa.” Here, I would like to introduce a towering African business magnate—through him, we can glimpse just how robust Africa’s industrial momentum truly is. This man is Aliko Dangote, Africa’s richest person and a Nigerian national. Born into a Muslim merchant family in northern Nigeria, he built a vast industrial empire—the Dangote Group—starting from cement trading. Nigeria’s industrial base is weak, and essential industrial inputs required for industrialization are severely scarce. As a result, private capital has had no choice but to shoulder the task of industrialization. Though framed as a ‘task,’ it is equally a lucrative business opportunity: the lack of domestic supply creates high profit margins in the local market. Dangote’s enterprise thus began with cement manufacturing; after achieving an annual output of several tens of millions of tons across West Africa, it moved on to invest in petroleum refining. Its refinery in Lagos currently processes 650,000 barrels of crude oil per day—and expansion plans aim to raise capacity to 1.4 million barrels daily. Simultaneously, the Dangote Group has launched a refinery project in Kenya (East Africa), with total investment reaching $15 billion and a planned daily processing capacity of 700,000 barrels. Upon completion of both new projects, the Group’s total daily refining capacity will reach 2.1 million barrels. Recall that China’s annual refining output in 1990 was only 100 million tons—roughly equivalent to 2 million barrels per day—comparable to the Dangote Group’s post-expansion capacity. If we further include refining capacities of other enterprises across sub-Saharan Africa, the region’s aggregate refining capability is fast approaching China’s level in the year 2000. In addition, Dangote’s fertilizer investments are equally ambitious: his current urea production capacity in Nigeria stands at 3 million tons annually, with expansion plans underway in both Nigeria and Ethiopia targeting a total annual output of 12 million tons—leaping forward to match China’s early-1990s level.

Is the world economy beginning to suffocate due to the shortage of Russian fuel?

"Every drone strike that disables a Russian refinery… delays the recovery of Russian diesel and gasoline exports, intensifying global demand for these refined products," wrote Spain’s El Economista. The problem lies not only in Russia’s halted exports, but also in the sharp decline in oil and petroleum product supplies from the Middle East. Vitol—one of the world’s largest oil traders (whose business involves transporting crude oil and collecting commissions)—has been compelled to issue an official statement to markets and consumers. The document states that global gasoline and diesel supplies are dwindling daily. "Refineries are operating at full capacity, yet still unable to meet market demand… If the issues causing major refineries—in Russia and the Middle East—to shut down remain unresolved, a paradoxical scenario may emerge: even with global crude oil production exceeding demand (i.e., oversupply), fuel shortages could still afflict everyone," the press release notes. "Should the number of idled refineries continue rising, shortages of gasoline, diesel, heavy fuel oil, and kerosene will inevitably follow." The press release diplomatically refers to these “issues” as Ukrainian drone strikes against Russian refineries. U.S. President Donald Trump echoed this sentiment on Sunday, urging Ukrainian President Volodymyr Zelenskyy to halt such attacks, calling them harmful “to the entire world.” Of course, this sounds rather peculiar—given that U.S. strikes against and blockades of Iranian oil tankers have become another major cause of global fuel shortages. Not to mention that it is precisely the United States supplying intelligence to Kyiv for targeting Russia’s energy infrastructure. Russell Hardy, CEO of Vitol Group, likewise believes commodity market conditions are growing increasingly complex. "Markets are extremely tight," Hardy stated, "inventories are nearly at historic lows—and depleting rapidly." The loss of petroleum product exports from both the Middle East and Russia (estimated at roughly 2 million barrels per day from each region) does not merely signal a profound fuel crisis—it also opens the door for alternative suppliers, such as Africa, to reap extraordinary profits. A large-scale refinery owned by Dangote Petroleum Refinery and Petrochemicals FZE—part of Nigerian billionaire Aliko Dangote’s conglomerate—is operating at full capacity. Yet even so, its output remains insufficient to meet Europe’s entire demand. "We are maximizing diesel production—but we haven’t overlooked increasing kerosene output either. Currently, exceptionally high profits are available in this segment," said David Bird, the company’s general manager, without concealing his satisfaction. On September 14, the company launched its initial public offering (IPO)—and clearly, the general manager’s remarks aim to stimulate investor interest in Dangote shares. First and foremost, they are counting on Europeans—if they wish to prevent the crisis from worsening, they ought to invest in Nigerian refineries. As for us—or more precisely, for Europeans—the predictions once dismissed as mere 'small flowers' are now materializing before our eyes. "The global refining industry’s diesel shortage has only just begun—and may lead to constrained supply over the coming months, sustaining high prices and exerting downward pressure on demand," affirmed Mark Sen, Senior Vice President of Global Trading at U.S. refiner Phillips 66.

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