MULTILEVEL OPTIONS FOR NATIONAL FUEL SUFFICIENCY

 BOLAJI AFOLABI argues the need for government to support and protect private sector investments

After blossoming into formidable players and conglomerates in Nigeria’s business firmament, some actors in the private sector diversified into the complex, intriguing, but superbly viable petroleum sector. With globally-acclaimed business mogul, Aliko Dangote as the head of the orchestra, these entrepreneurs appeared into the industry with gusto, fervour, and can-do-it spirit. Their financial capacities, institutional vision, and economic blueprint determined the level of their investments in the sector. Dangote and these visionaries, actually took the plunge into uncertain oil and gas sector with minimal or zero-sum knowledge and experience. Not many industry watchers took them seriously though.

Dangote, for one, said he was serially discouraged by friends who had unpleasant experiences and who shared negative narratives about the sector. Fired by inexplicable factors, however, Dangote etal, began a silent and salient revolution geared towards transforming the sector, and ensuring national economic development. Since all of Nigeria’s four refineries became dysfunctional, the country has been importing almost all of its petroleum product requirements. Nigeria has always had four refineries, two of which are located in Port Harcourt and one each in Warri and Kaduna. Put together, all four refineries should optimally produce a total of 445,000 barrels of petroleum products daily.

A visionary Dangote who has remained a very key player in the nation’s economy for three decades now, latched on the tardiness and sloppiness of government in keeping its refineries working and conceived of a 650,000 barrels per day, ultra-modern refinery. This would surpass the maximum capacity of state-owned refineries with surpluses to service the nation’s needs. While Dangote was envisioning a mammoth, $20Billion refinery reputed to be the second largest in the world, the liberalisation of the petroleum sector encouraged smaller, more compact refineries. Modular refineries were popular in parts of the world but were novel in our own parts. In instances, these potential private investors in the petroleum sector coursed through man-made labyrinths in relevant governmental departments.

Nigerians who have been at the receiving end of serial petroleum products scarcity and arbitrary pricing were recently jolted when NNPC, through one of its agencies declared that Dangote is just about 45 percent completed! As if that was not enough, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA) through its chief executive officer, Farouk Ahmed, labelled preliminary products from the humongous maze of technological wizardry as “substandard!” Ahmed seemed to be spearheading a conspiracy to discredit industry-wide local petroleum production, which will naturally involve smaller players like the now popular more compact refineries. Ahmed’s unguarded comments infuriated not a few watchers of Nigeria’s economic scene. These include foreign investors who are daily bated by the federal government to look in the country’s direction.

President of the African Development Bank, (AfDB), Nigerian-born Akinwumi Adesina weighed into the fracas and cautioned state players. He admonished that the whole wide world was watching Nigeria demarket its own, while goading foreign interests to invest in Nigeria. He expressed concern to the effect that if big players like Dangote who has Africa-wide manufacturing presence can be so unfairly treated, what will be the fate of other contributors to the nation’s gross domestic product, (GDP)? The administration of President Bola Tinubu has moved in to calm the storm by calling for a truce between the “warring” camps. Heineken Lokpobri, Minister of State for Petroleum, (oil) convened and chaired a meeting of the various interests last week.  

In the aftermath of the bad faith shown a mega-player like Dangote, industry watchers are calling for protection for modular refineries. At the last check, about 25 of them had been licensed by government much as not all of them are in operation. Expectedly, most of the refineries are located within the territories of oil producing states and communities in the country. They are mostly to be found therefore in: Ondo, Edo, Delta, Bayelsa, Rivers, Akwa Ibom, Cross River, Abia and Imo States. By their configurations, they are less complicated than the monstrous pipes and trunks which weave and wind in serpentine motions, around the mega refineries. They produce automotive gas oil, (AGO); household kerosene, (HHK); marine diesel oil, (MDO); high pour oil, (HFO) and naphtha. 

Modular refineries have become popular in parts of the world now because they operate from as close to the wellhead of their mining sites as possible. They are not be-laboured by cross-country piping which are not only expensive but risky. Oil pipeline networks across Nigeria have serially suffered from wilful vandalism and destruction impacting the delivery of feedstock. Over time, Nigeria’s daily crude oil supplies have been atrociously abridged by the antics of miscreants. Such tampering with supply lines is minimised in the case of modular refineries. Typically, they meet the needs of their contiguous geo-locations which reduces the risks of moving inflammable products on the highways. Technocrats in the oil and gas sector may yet guide policymakers about the possibility of having modular refineries in every state in the country.

Just while avoidable bile was being vented on the recent Dangote saga, invitations have been coming from neighbouring countries intent on doing business with Nigerian moneybags. Gabonese president, Brice Oligui Nguema recently beckoned on Dangote to extend his entrepreneurial benevolence to the oil-rich country. To underscore his seriousness, Nguema promised to create a conducive environment for Dangote, whom he believes would bring enhanced industrial capacity, immense job creation, and technology transfer to the french speaking country. Elsewhere, the government of Equatorial Guinea which is also in Central Africa, is making every effort to support the Nigerian promoters of the modular refinery in the country. Elsewhere in Sao Tome and Principe, a Nigerian brand once powered the oil-rich co

untry in the small country. These are classic confirmations of the old saying about a “prophet not recognized at home, but treasured, honoured, and beautified abroad.”

The very fact that some of these “small” African countries have a higher per capita income than the “big brother Nigeria” is the more reason our government is doomed to support local investment. Primarily, investors need assurances on policy consistency and political stability. Once these are in place, they are ready to activate their programmes and deploy their resources. We must be guided by the recent departures of certain popular brands, notably in the manufacturing and retailing sectors from our country. Such exits have been expedited in the wake of asphyxiating economic conditions, flowing over from the administration of former President Muhammadu Buhari. The bragging refrain about Nigeria as the “giant of Africa” is only plausible if our touted size translates into the overall wellbeing of our people.

Truth is that Nigeria is in dire need of visible and tangible growth, and downstream, spectrum-wide transformation. Given the numerous benefits derivable from private investments, it will be imperative that these refineries be seen as “Nigerian initiatives and projects” by government and it’s agencies. They must be supported and protected to grow and contribute towards national development. Bickering, power-play, influence-peddling, mud-slinging are not the needs of Nigerians at the moment. The citizenry expects government to continue with every commitment to strive towards tangible improvements in their quality of lives. They want government to fight poverty. They seek practical reduction in inflation rate. They want to see a cutting down on over reliance on foreign exchange which stifles meaningful development.

 Afolabi, a Development Communications Specialist, was of the Office of Public Affairs, The Presidency, Abuja