Former Vice President, Atiku Abubakar is querying the plan by the federal government to spend 1.5 billion dollars for the rehabilitation of the Port Harcourt refinery.
At the end of the Federal Executive Council meeting yesterday, the minister of state for petroleum announced the government’s plan, explaining that the repair work would be undertaken in phases for a total of 44 months.
But in a statement today the former vice president describes the proposal as a waste of resources, especially coming at a time that the nation’s economy is in dire straits.
According to him: “to therefore budget the sum of $1.5 billion to renovate or turn around the Port Harcourt refinery would appear to be an unwise use of scarce funds at this critical juncture for a multiplicity of reasons.”
Atiku suggests that the best course of action will be to privatize the refineries for more effective and efficient management.
In a comparative analysis, Mr. Atiku described the planned rehabilitation as too expensive, saying shell petroleum development company sold a refinery of similar size in the u.s. last year for $1.2 billion.
In the words of the former vice president, “we cannot as a nation expect to make economic progress if we continue to fund inefficiency, and we are going too deep into the debt trap for unnecessarily overpriced projects.”
He notes that the country’s debt which has spiked from ₦12 trillion in 2015 to ₦32.9 trillion today, is shocking enough to cause the nation to be more prudent in the way it borrows.
Below is a full statement as released by the former vice president.
That Nigeria’s economy is in dire straits is a fact well-known both to the nation and to our international partners. Unemployment has just reached an all-time high of 33%, while inflation has hit another record high of 17%.
At this critical period, we must as a nation be prudent with the use of whatever revenue we are able to generate, and even if we must borrow, we must do so with the utmost responsibility and discipline.
To therefore budget the sum of $1.5 billion to renovate or turn around the Port Harcourt Refinery would appear to be an unwise use of scarce funds at this critical juncture for a multiplicity of reasons.
First of all, our refineries have been loss-making for multiple years, and indeed, it is questionable wisdom to throw good money after bad. At other times, I have counselled that the best course of action would be to privatize our refineries, so they can be run more effectively and efficiently.
Moreover, the cost appears prohibitive. Too prohibitive, especially as 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. We must bear in mind that the Shell Martinez Refinery is more profitable than the Port Harcourt Refinery.
Given this discrepancy, might we ask if there was a public tender before this cost was announced? Was due diligence performed? Because we are certainly not getting value for money. Not by a long stretch.
We cannot as a nation expect to make economic progress if we continue to fund inefficiency, and we are going too deep into the debt trap for unnecessarily overpriced projects.
Our national debt has grown from ₦12 trillion in 2015 to ₦32.9 trillion today. Surely that is shocking enough to cause us to be more prudent in the way we commit future generations into the bondage of bonds and debt.