AT a time that fuel scarcity is biting harder on the home front because of graft in fuel importation chain: Also at a period that the nation’s four refineries’ moribund state is accorded tepid official efforts; it is sad that President Goodluck Jonathan has gone abroad to arrange the construction of jointly-owned petroleum products’ refinery with Namibia. That was the hallmark decision reached through a joint communiqué issued in Windhoek, Namibia at the end of his visit purportedly made at the instance of President Hifikepunye Pohamba. This arrangement, in our view, is economically unsound.
The visit produced 11 Memoranda of Understanding (MoU) reportedly assented to by the two leaders, which among others, include: training of Namibian diplomats at the Nigerian Foreign Service Academy, provision of volunteer health professionals to Namibia under the Technical Aid Corps Scheme, initiative on youth development, bilateral air service agreement and waiver of visa requirements for citizens holding diplomatic and official passports. Others are extradition treaty, cooperation in the legal field, treaty on mutual legal assistance in criminal matters, understanding in the field of geology, mining, mineral processing and metallurgy, trade, investment and economic cooperation and cooperation in the field of tourism.
However, the crux of the agreement is the refinery that is scheduled to be wholly private sector driven. Notwithstanding the fact that the two presidents have urged members of the Organised Private Sector in their respective countries to take advantage of the opportunities arising from the joint venture by making the project a reality, its un-strategic location in the Namibian area of Walvis Bay is of concern.
We know that no nation is an island, especially in contemporary situation where the world has become a global village. Nonetheless, we believe that a nation, while dealing with other countries must consider that vital principle of comparative advantage. For instance, Nigeria is an oil producing giant and we thought that this reality would have been of paramount consideration whenever the country is reaching an understanding with Namibia or any other country.
Why would President Jonathan not convince stakeholders in Namibia to consider setting up the refinery in Nigeria? Was the important economic point of proximity to raw materials not of any issue in the two presidents’ deliberations? After all, we are aware that there is no oil in Namibia. The questions now are; what could then be the motivation for Nigerian investors going as far as Namibia to seek partnership before building a refinery? Is it not possible for them to emulate Aliko Dangote whose Greenfield refinery, a private idea, will soon become functional?
In our view, it makes more economic sense to have the refinery established in the country and the end-products exported to Namibia and other countries that might be in need of them. Being a private sector -driven initiative, the choice of site of such refinery would go a long way in reducing production cost, bring down petroleum products prices, provide readymade market for the country’s high domestic fuel consumption and cushion the effect of current intractable fuel scarcity. Above all, such adroit economic move will also generate more profits for investors from both countries.
That this obviously rational economic choice was not made has left us wondering about the genuine identities of the powerful forces behind these so-called investors from both countries. Are these ‘investors’ truly out to follow rational economic sense or they are just disguised persons that are merely desirous of protecting the interests of their unseen promoters? The Nigerian public deserves to know.
