The Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, has promised an end to fuel importation into Nige ria by 2018. He spoke during a recent visit to steel fabrication and power solutions company, Mikano Interna tional Limited, in Lagos. Stopping the importation of oil, he said, will save Nigeria a minimum of $10 billion.
Reducing the nation’s huge imports bill is, indeed, a desirable objective. This is more so as the minister con firmed that Nigeria also spent about $3 billion importing steel and $6 bil lion on cars and spare parts imports.
Agaga said the era in which the country relied entirely on the export of raw materials was over and that with the launch of the government’s “Industrial Revolution Plan” which began in 2012, Nigeria can no longer be import-dependent, “especially in products we can produce ourselves.”
In apparent reference to the crash of crude oil price in the world market, he noted that “we have identified 13 products that will replace oil. These are areas where Nigeria has compar ative advantage and export capacity. Mexico did it (diversified its economy and revenue base) in seven years.”
We would, indeed, have loved to share the minister’s optimism on the 2018 target for ending fuel importa tion. Of all the areas in the nation’s economy in which Nigerians feel let down by successive governments, none hurts as much as the fact that the country still imports a lot of its fuel in spite of being the 8th largest producer of oil in the world. Fifty-seven years after the country com menced oil exports, the country can not refine enough oil to meet local demand.
This is in spite of having built four oil refineries. These refineries were built with heartbreaking indifference to the need for their maintenance and technology transfer. In other coun tries, a contract to build a petroleum refining facility would automatically come with a technical agreement to enable the citizens eventually run, re pair, and maintain the facility on their own. It would also include building up skills which would enable the country build new refineries on its own if it so needs.
Instead of this, billions of naira are spent on the “turn-around main tenance” of the refineries, in spite of which the refineries run at about 25 per cent of their capacities. At the time the second Port Harcourt Refinery was conceived, it was to refine products for ex port, since the other three refiner ies were considered adequate for Nigeria’s domestic needs. And, as domestic needs increased with greater population and much more robust industrial activity, the country’s planners ought to have factored the increase into national planning.
Previous efforts to build more refineries have failed, including the one involving the issuance of one dozen or so licences to differ ent companies, authorising them to build independent refineries. The situation seems to have be come so desperate that the coun try, at a point, began negotiations with Niger Republic to supply re fined products to Nigeria.
At the moment, the Dangote Group which is planning a refin ery has promised Nigerians that in 2016, the percentage of pe troleum products that would be imported would be reduced and might disappear altogether in 2018.
If this is the basis for the min ister’s optimism, let everything be done to make the plan a real ity. The percentage of Nigeria’s oil requirement that is imported is small, but the $10 billion sav ing we can make from stopping the importation could change the lives of millions of Nigerians if de ployed elsewhere in the economy.
The benefits of ending the im portation of fuel are so obvious, they do not need repeating. But, the people need to know the ba sis for the optimism and the plan to achieve it to help keep the gov ernment on track. Nigerians truly wish that we do not have to im port refined petroleum products.
The government should set benchmarks for the plan to stop oil imports and institute mea surable project evaluation tech niques, if only to restore the faith of Nigerians in its ability to make the initiative a reality.