Still On The Whooping $1.5bn For Port Harcourt Refinery
It is no longer news that the President Muhammadu Buhari-led Federal Executive Council (FEC) had recently approved a 'whooping' $1.5 billion to rehabilitate the epileptic Port Harcourt refinery.
This move, according to the government, is to ensure that the obsolete refinery, which last benefitted from a turn-around maintenance work in 2000, comes back to life, while also contributing to the development of Nigeria's oil sector.
As expected, the 'mind-boggling' contract awarded for the rehabilitation was greeted with mixed reactions. In some quarters, the debate was on how the Federal Government intends to raise the large sum of money to finance the project, especially at this critical period of the nation's economy.
Loan may seem to be the only option available for the government to raise funds for the rehabilitation work. But for a country whose national debt has grown from ₦12 trillion in 2015 to ₦32.9 trillion today, we cannot afford to seek additional loans, at the expense of our future generations.
In what seems to be the latest reaction on the project, Minister of State for Petroleum Resources, Mr. Timipre Sylva, in an interview with Channels Television, gave a breakdown of how the funds would be raised.
He said NNPC is going to spend about $200 million from its internally generated revenue sources, while the federal appropriation will put in about $800 million, and it is already broken down into three parts.
“The 2020 appropriation will give $350 million, 2021 appropriation will give another $350 million, and 2022 appropriation will give another $100 million, making it all $800 million from appropriation, and then the rest of it will now come from Afreximbank,” he added.
Flagbearer of the opposition Peoples Democratic Party (PDP) in the 2019 presidential election, Atiku Abubakar, while questioning FG's proposed action, disclosed that Shell Petroleum Development Company, last year sold its Martinez Refinery in California, USA, which is of a similar size as the Port Harcourt refinery for $1.2 billion.
According to him, the government’s decision to invest $1.5bn on the refinery defies logic.
That Nigeria’s economy is in dire straits is a fact well-known to all Nigerians. At this current time, unemployment has just reached an all-time high of 33%, while inflation has hit another record high of 17%.
The country keeps churning out graduates year in and year out but the labour market has become a death trap where young people are hopelessly counting on for a meaningful livelihood that hardly comes about.
In its latest report, the United Nations Children’s Fund, UNICEF, has said, about 26.5 million Nigerian Children do not have enough water to meet their daily needs and are experiencing high or extremely high water vulnerability.
UNICEF lamented that Nigerian children will be the biggest victim of the coming water crisis in the world.
Sad! Who has the next generation offended? In Nigeria, the minors are angry with us because we have failed in keeping them safe from occasional abduction from their dilapidated schools, to bandits who are collecting ransom money for killing their colleague.
Politics aside, the rehabilitation of the Port Harcourt refinery is apparently not a bad idea, but considering the dire financial strait of the country, and the anticipated intervention of the soon-to-be-completed Dangote refinery, which will be producing 650,000 bpd, one wonders which market the Port Harcourt refinery intends to serve.
Drawing lessons from the advice of the erstwhile Minister of State Petroleum, Ibe Kachikwu, the state should sell off the refineries and let private entities with the capacity to repair and run it without burning public funds manage it.
We cannot, as a nation, expect to make economic progress if we continue to fund inefficiency, and we are going too deep dive into the debt trap for unnecessarily overpriced projects.
While fixing dead refineries have become important, there are more urgent and pressing needs for the country especially at a time where we are unsure of how the refinery would be given effective commitments, unlike previous efforts that yielded less or no results.
The Nigeria government must continue to look inward and to develop industries that can work as rural-urban migration has undermined our cities and our evergreen forests are harbouring criminal elements.
I strongly advise the government to use relevant resources in developing the forest by engaging agro rangers and setting up ranches in the forest by providing schools, health care facilities, cottage industries and good road networks in selected forests where young people will be engaged.
While having functional refineries should be a priority, the timing of this current development remains a source of worry. A lot can be done for the country with $1.5bn, rather than investing in rehabilitation work at an obsolete refinery.
Gidado Yushau Shuaib is the Editor of Youths Digest and The News Digest. He wrote in via [email protected]