Barrel vault: a Nigerian refining giant rises

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The economist. Hello and welcome to the intelligence from the Economist. I'm Jason Palmer.

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And I'm Rosie Blore. Every weekday we provide a fresh perspective on the events shaping your world.

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A surprising fraction of Iran's diaspora lives in California. Like Iran itself, it's multi ethnic, multi religious and multi generational. We get a view from what's called Tehrangeles

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and millions of people are diagnosed with cancer each year. And it's hard to predict how you'll respond until it happens. But a new study finds something I'd never expected. A surprising link between cancer and crime rates.

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First up though,

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Let me take turn off my ring. Hi.

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Good afternoon, sir.

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Good afternoon. How are you?

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All right. Sir, just to test your sound, please may you introduce yourself.

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Ali Ko Dangote's Money with oil prices

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skyrocketing, last week was the perfect time for us to visit Ali Kodangute.

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Ore Ogambi is an Africa correspondent for the Economist.

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He's not only Africa's richest man, but he's also the owner of Africa's largest refinery.

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Well, you know, it's a very rough period, you know, especially now. I've seen it two days ago, I think on Tuesday also where the crude ranges between $90 to $119.50.

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My colleague and I sat down with him on Thursday while news reports from Iran were beaming on the news channel behind us.

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You know, Nigeria is very lucky to have the refinery because right now it's not even about price, it's about availability, which we have now actually delivered that availability.

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The Strait of Hummus is still effectively blocked and that means there are lots of people calling up Mr. Dangote's phone for solutions.

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It's a Crazy situation right now really. And I think this situation will continue for a while

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now. Ori, we spoke about the refinery when it was just opening up. But remind me about Mr. Dangote and how he got where he is.

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Ali Kudangote is a 68 year old entrepreneur and he runs a conglomerate that does everything from cement to tomato processing. Bit of infrastructure, he's branching out into mining. But in 2024 he opened a massive $20 billion oil refinery. It's just outside of Lagos. It's spread across land about half the size of Manhattan. It is really huge, but that's what's made him extra relevant right now. Since February of this year, that refinery has been able to process 650,000 barrels of crude a day. It turns it into everything from gasoline for cars to jet fuel. And those are things that are in high demand at the moment.

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I can tell you without the refineries would have been out of all the petroleum products. Nigeria would have been at a standstill without the refinery.

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He has a grand plan to ramp up Africa's industrial capacity and importantly make the region much more self reliant in a world that is this unpredictable.

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So the refinery part of his plan does seem to be working out, not least because of geopolitics as they are.

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Well, exactly. And before we get into the geopolitics, it's also had real benefits for Nigeria. So despite being Africa's largest crude producer, Nigeria has historically spent lots of scarce dollars re importing its own crude that's being refined abroad. It doesn't have to do that anymore. It gets to save those costly dollars and put them towards much more important things. But also it takes away those fuel shortages that used to create lengthy queues around the corner and that have been a real problem for Nigeria for about 50 odd years. As if Mr. Dangote's refinery isn't big enough, he's planning on expanding it so he can offer that same energy security to countries like Cameroon and Angola, other countries in the region that also are still too dependent on the rest of for their own energy supplies.

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We will end up being the largest refinery in the world. We'll have almost about 48% of the entire Saudi Arabia's refining capacity. So it's not a small and it will mean quite a lot to the region.

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Beyond just oil, the refinery also produces fertilizer. And since that's another thing that's getting stuck in the Strait of Hormers, this is also bringing him new customers. This is good for his margins. It's Good for farm yields both in Africa and in the rest of the world.

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So it seems clear then that this refinery has just made a big African businessman even bigger.

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Well, exactly, Jason. He is a capitalist after all. I mean, if you look at his big cement division, for example, he leveraged tax breaks, political favors, import bans, and he managed to build a company that has such big profit margins, that has such capacity that you wouldn't even bother competing with him. He can single handedly crash prices if he tried. And that's why people accuse him of being a monopolist. That's a common criticism that he receives, although he denies this. He says that he's being completely misunderstood. But you can already see signs of that model being replicated in his refinery business. I mean, for example, Nigeria's regulators are saying that they are freezing new import licenses for anyone else who imports petrol. So you're basically trusting the country's entire energy security into one man's hands. It's great for him and his bank balance, but obviously a less competitive energy environment probably isn't very good for Nigerians.

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But he is giving them a bunch of jobs at what is, as you say, an enormous refinery.

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I mean, we didn't see as many people on our refinery tour as I think we thought we would. Another way in which Mr. Dangote widens his margins is by relying quite heavily on foreign subcontractors, especially for the more technical kind of high skilled jobs. And that comes at a cost because the kind of local knowledge transfer that you'd hope would really lift up the population and inspire a new generation of Dangotes just isn't really happening. The refinery's managers are mostly Indian experts and there are a few scores of Nigerian employees and trainees that we ran into. But Mr. Dangote's projects are lean on staff by design. He's going for efficiency and high standards.

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He says it doesn't matter whether they are English, they are Indians, they are Nigerians, it doesn't matter. But they are our staff.

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And to be honest, I think he is well aware of the new position that this refinery puts him in.

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We don't have any reason today to go and increase even capacity because we want to ward off competition. Already where we have competition will never. There's nobody. I'm telling you as a proud African, there's no African that can build a refinery.

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It's a compliment, it's a point of pride, but it's also a dare to anyone else who wants to try. That is a man that is fully Aware of his power.

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But what about that wider picture that you talked about earlier? The ramping up Africa's industrial capacity, helping it become more self reliant. Is that a realistic vision or just. It sounds good?

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I think it's a bit of both. I think he does care about Africa, but ultimately he's got his eyes set on the whole world. His main buyer of his urea fertilizer is Brazil. He parks his wealth in Dubai. He exports those refined petrol products not just to neighboring countries. And he's not just supplying Nigeria, they're also going to Europe and America. He plans to take the refinery public this year and there are whispers of a dual listing in both Lagos and in London. But I think for all his flaws, Africa is much better off because they have Africans like this investing a lot of their capital into the continent. The region is becoming more resilient in the face of global shocks. Big oil prices that would usually rattle the continent. Still are, but slightly less so. And Mr. Rangote has even more lined up. He's branching into steel, into mining. He told us stuff about copper smelting, power generation. That should make the continent even more resilient than it's already becoming. As he gets up to leave, his interview and staff popped up from everywhere. He left us with a promise.

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When you come back in three years time, what you have seen today in the complex, it will be three times.

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And I don't know Jason, I personally wouldn't bet against him.

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Alright, thanks very much for joining us Jason.

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Thanks so much for having me.

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Half of all Iranian Americans live in California and nearly a third of them, which is about 230,000 people, live around Los Angeles.

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Aaron Braun is our west coast correspondent.

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Many of these people arrived after the revolution in 1979, and a lot of them were Iranian Jews. These first immigres were often really wealthy and highly educated and they settled in neighborhoods like Westwood and Beverly Hills. And little by little, the community built what's known locally as Tarongeles. Westwood Boulevard is filled with Persian restaurants and bookstores, and Iranian flags hang from supermarkets and are across entire buildings like a rug shop that I visited. So when America began bombing Iran last month, many of the residents of Tarangilis came to Westwood Boulevard to voice their support and their hope for the future. This morning I am walking down Westwood Boulevard just south of Wilshire in West la, and I've just been talking to shop owners, restaurant owners about their views of the war. It's about a week now since the bomb. One of the people I met was Ruzba Farhanipur. He's the owner of a couple of restaurants on Westwood Boulevard. We met at his Greek taverna where a shark tank was in the back of the room and the salt and pepper shakers had little Greek figures on them.

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I was here the time of the Khamenei killed. We heard the news. I was suspicious. That's not true because sources I couldn't trust until that President Trump put it in his own truth, social.

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But Roozpa is not just a restaurateur. He was an opposition leader in Iran and he fled the country after leading a student uprising in 1999. For decades he's been living in Los Angeles.

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I opened grab the bottle of champagne and open it and drink it out. So that's on the tv. So that was so. And then after that, anybody passed by came to congratulate me. I poured the champagne for them.

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It's important to say that the Iranian diaspora is vast and diverse. It's multiethnic and multi religious and multi generational. People have very different opinions on how this war should proceed. Elham Yaguvian is an activist and a local business leader in Beverly Hills. She is desperate for the regime to fall.

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Leaving Iran in that situation wouldn't help the Iranian people because in the streets

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of Iran, people have, you know, stealing danger on every.

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She believes America should stay the course, should keep up the bombing until the regime is absolutely crippled.

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They just said it to find excuse

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to kill people in the streets.

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So no, I 100% disagree. This is not the right time to leave the Iranian people alone. But not everybody agrees Roozbah, that restaurateur who was pouring champagne for people. He's a longtime friend of hers and he's much more skeptical of America's involvement adviser.

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I could suggest that's the best time. Instead of waiting there to become an unending war or we get stuck in something like Iraq, Afghanistan.

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He's worried that what's happening in Iran could one day resemble Iraq or Afghanistan become another of America's forever wars. He wants America to declare victory and stop the bombing so that Iranians themselves can take to the streets.

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So that's the US So that's a big victory. Cheers and leave and our ready regime.

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But the two are united on one thing. Neither of them wants a Venezuela like outcome where the President picks a more pliable member of the regime to run the country. They believe Iranians should determine their own future.

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Honestly, I believe that choosing the leadership

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for Iran should be in control of the Iranian people.

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Not west, not Israel, no, no one else.

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Support for Donald Trump and his aggression might weaken as the war drags on. It already feels like the celebrations are subsiding in Westwood. I went to a concert at UCLA in advance of Nowruz, the Persian New Year, about a week after the start of the war. The first song the orchestra played was a funeral march in honor of the protesters the regime had killed in January. The music projected sorrow, but also resilience.

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So I don't know if you've seen the program Breaking Bad.

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Ainsley Johnstone is a data journalist.

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The idea is that this mild mannered chemistry teacher is diagnosed with cancer. And to try and provide for his family and to pay for his treatment, he turns to a life of crime and becomes a drug lord.

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What I'm making is classic coke.

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All right, there's a recent study that shows that this plot may not be as outlandish as it seems.

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Okay, and how did you work that out?

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So it was a study by researchers based in Denmark and the Netherlands, and they used administrative data for the whole of the Danish population between 1980 and 2018. They specifically looked at people who at some point during this time were diagnosed with cancer. And they found that Those people were 14% more likely to commit a crime after their diagnosis compared with people who were yet to be diagnosed with the condition. Interestingly, they found that in the year of and immediately following their diagnosis, they actually were a bit less likely to commit crime, probably because they were in treatment. Or maybe they were actually acutely unwell in this time. But what they found was then following this after a few years, and then extending for a whole decade after the diagnosis, the likelihood that the patient became involved in crime increased by a lot.

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And what kind of crimes are we talking about?

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So the biggest absolute increase was in what the authors called economic crimes. So that's things like drug dealing and burglaries. And that gives some hints to what the motivations might be. So they think that people may turn to crime because of money problems. In Denmark, even Denmark that has a great social welfare system, people after a cancer diagnosis are less likely to be employed and they're likely to have a lower income. But also they found that as well as these economic crimes, violent crime also increased. And this was actually the biggest percentage. They found that things like homicide and assault rose by 21% after a diagnosis.

19:14

That's a massive increase. Was there some history of criminal past or something else going on as well?

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So no, they found that the effect was basically the same whether someone had a history of criminality or whether they were a first time offender. But there were other predictors that kind of moderated this effect. They found that people who were particularly financially vulnerable, so perhaps people who don't own a home, people who are single, that they were the most likely to have an increase in crime rate. They also found that during the course of the study there was this change in the municipal level welfare benefits. Some municipalities became more generous and others became less generous. And what they found was that in the places where welfare became less generous, there was again a bigger increase in criminality. The other predictor was patient's prognosis. So patients who were diagnosed with more severe forms of cancer, cancer that was more likely to be lethal, they were the ones in which offending rose the most sharply. The authors think maybe this is that these people, they think they have a shortened lifespan and the idea of going to prison just maybe is less of a threat to them.

20:06

What about other diseases? Have they looked at that? Other life threatening illnesses?

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They haven't looked at other life threatening illnesses. The reason they looked at cancer was because it's a very clear diagnosis. There's lots of different types of cancer. It affects people across income levels. But the idea is that this may well generalise to other diseases as well. And the gender split, gender was a very important predictor. So men tend to commit a lot more crime, particularly a lot more violent crime. And the effect of cancer on crime was much bigger in men. So they had this much greater increase after diagnosis.

21:20

And how might these sorts of consequences play out in other parts of the world?

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So when I spoke with one of the authors of the study, she said that in her mind, these results were really a kind of lower bound estimate of this effect. So as I mentioned, they're looking at Denmark. It has this very generous social welfare policy. And the authors think that in places where there is maybe less of a social safety net that this effect might be greater. And I think the effect on crime is just not something that governments think about when they're designing health care and welfare policies. And maybe they should.

22:02

Ainsley, thank you very much.

22:35

Thank you.

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22:57

With no fees or minimums on checking accounts, it's no wonder the Capital One bank guy is so passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how most Capital One cafes are open source seven days a week to assist with your banking needs. Yep, even on weekends, it's pretty much all he talks about in a good way. What's in your wallet? Terms apply. See capitalone.com bank capital1NA member FDIC.

23:49