Criticisms trailing Wednesday’s approval of US$1.5 billion for the renovation of Port Harcourt Refinery, by the Federal Executive Ccouncil, FEC, swelled Thursday with former Vice President Atiku Abubakar frowning at the plan.
He described the planned rehabilitation as wasteful and suspicious.
At the end of the FEC meeting, Wednesday, the Minister of State for Petroleum announced the planned rehabilitation of the refinery, saying the rehabilitation would be executed in phases spanning a total of 44 months.
But on Thursday, former Vice President Atiku Aabubakar roundly condemned the proposal, describing it as a needless waste of resources, especially coming at a time that the nation’s economy is in dire straits.
“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,” he said.
Atiku maintained that the best course of action would be to privatize the refineries for more effective and efficient management.
Atiku described the planned rehabilitation as too expensive, disclosing that Dutch oil giant, Shell Petroleum Development Company sold a refinery of similar size in the U.S. in 2020 for $1.2 billion.
“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,” the former vice president further stated.
He observed that Nigeria’s debt, which has spiked from ₦12 trillion in 2015 to ₦32.9 trillion in 2021, was shocking and disturbing enough to cause the nation to be more prudent in the way it borrows.
Below is the full text of the statement 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.