By Sunny Chuba Nwachukwu
After a detailed analysis of the piece on printing money by Nick Agule the general public should be encouraged by his well articulated presentation and the five insightful points with viable propositions, as a way forward to improving the economy; (on the heels of his very powerful and constructive criticism, with professional touch on Quantitative Easing, QE, which is a monetary policy tool used by central banks all over the world, to inject money directly into the economy); by cost reduction and revenue increase, as economic management tools to the Nigerian federal government.
From his points of view, he dealt with and pontificated on his topic very decisively, but on his third suggestion: “Stop the $1.5 billion PH refinery repair” (as planned), which specifically is the bone of contention, and what attracted my interest in his entire presentation hence, this article. He based his fear on the known fact that government projects are never delivered within budget, and may end up costing the nation $3-5 billion (which sincerely, is not impossible, as he pointed out); and thereafter posited further that the refining facilities could be sold as scrap; for the buyers to bring in the said $1.5 billion and do the repair themselves.
This, of course, is where I clearly differ with him on such proposition or counsel. Life is full of uncertainties and very unpredictable, quite alright, but there is no hard and fast rule about any particular mission under this planet earth (at any particular point in time) unless, you work the path strategically by surmounting any imminent challenges along the course. This, therefore, erases ‘pessimism’ in business ventures because, ‘business is risk’, they always say. We definitely cannot throw away the bath water with the baby just because of the past poor performances of the NNPC in managing a very lucrative local refining operation in the four moribund facilities. Someone somewhere must right the wrong, someday!
The facilities in question actually include the very first local refining plant located inside old Port Harcourt town, with a capacity of 60,000 barrels of crude per day; built in 1965 (though started on 38,000 refining capacity). Exactly the same plant and size built the same year with that of Cote D’voire’s, which is still fully operational till date. It still remains the only refining plant in that country that does not even produce crude oil, yet fully functional after 66 years. Over here, Nigeria has a further three big local refining facilities but which are all moribund as at date. What a country? What terrible wickedness and corrupt mindset against the state, for not protecting and preserving the public assets and the nation’s common wealth? It is good to note that this very plant is part of the 210,000 barrels daily crude refining capacity in the rehabilitation project for the mapped out $1.5 billion.
Honestly speaking, with the desperate messy economic situation and the deep financial quagmire from near total lack in provision of locally refined petroleum products that shall constantly service the urgent daily needs of the nation’s domestic demand and consumptions into the future, no human today, ought to debate further against this present planned rehabilitation project. Under one condition I base my argument though, that the prospective private investors going to acquire and purchase the facilities, and manage them MUST BE PHYSICALLY INVOLVED AND PARTICIPATE from the onset, in the disbursements of the entire $1.5 billion because, they must pay back exactly the entire fund spent for the rehabilitation to the Federal Government (as part of their purchase price agreement, done through a very transparent bidding process organised, supervised and delivered by the Bureau of Public Enterprises, which is the agency representing the government in the entire deal).
There is, indeed, an urgent need for a decision on this visibly dire straits of economic crisis looming over the nation, if we do not at this critical stage nip it in the bud, by shifting to local refining that can, at least, make the economy to be self-sufficient. And so, it is very apt to state that for me it is: “No going back” on the project! This is a necessary evil, at this point in time, for the nation’s economic survival, if we really appreciate the heavy foreign exchange load and financial stress it shall relieve the economy of.
Now, also trending is the latest news on Abdulsamad Rabiu of BUA Group and his France counterpart Jean Sentenac, the CEO of Axens, at a meeting where the Progress Acknowledgement Statement for the construction of a multibillion-dollars refinery in Akwa Ibom State, with a 200,000 barrels of crude oil daily capacity offtake, that will begin this year to produce Euro-V fuels, was made disclosed.
With Dangote’s 650,000 barrels per day refining capacity, federal government’s 445,000 barrels per day being rehabilitated, BUA’s forthcoming 200,000 barrels per day; this roughly gives us 1,295,000 daily refining capacity (if actualized). This excludes all the modular refineries (both the existing and yet to be completed ones in the country). By this development, the economy shall be comfortably positioned, not only as a self-sufficient energy producer but, also a net exporter of refined petroleum products that will fetch extra foreign exchange into the economy, in no distant time.
Nwachukwu, a graduate of pure and applied chemistry with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce.
Sunny Chuba Nwachukwu (FICCON, LS)
Frontpage November 4, 2019