Proposed refinery at Niger Republic border – Punch

After decades of squandering the country’s hard-earned resources and scouring the whole area around the now fast-receding waters of Lake Chad in a frantic, but futile bid to discover oil in commercial quantity, the Nigerian government is shifting its attention to another bizarre, money guzzling venture. This time, it is a plan to build a refinery at an unnamed border town between President Muhammadu Buhari’s home state of Katsina and the neighbouring Niger Republic.

A recent statement credited to the Ministry of Petroleum Resources said an agreement had already been reached between the two countries for the erection of the facility, complete with the construction of pipelines from the Nigerien oil fields of Agadem, in Diffa Province, to the refinery site. Without doubt, this sounds like another wild goose chase, which should be discontinued. It is a badly-thought-out plan which, if pursued, will only result in Nigeria having her fingers burnt.

At a time when the world is tending towards a private-sector-driven economy, it is amazing that Nigeria is still stuck in the past by embarking on such a state-sponsored project. Even the sole refinery that is in Niger, Soraz Refinery, located in Zinder, is not a wholly government-owned facility, but one that has a majority Chinese interest. If the government of that country considers it imperative to involve foreign investors in the building of its refinery, why is the Nigerian government so interested in direct funding?

This is a clear indication that the managers of the country’s economy have not learnt from their past mistakes, especially concerning the poor investment choices made in the oil and gas industry that have cost Nigeria so much over the years. For a country that has four refineries, yet depends on imports for refined petroleum products, because of her inability to run the refineries efficiently, there is no rationale whatsoever for contemplating the building of another refinery.

If the decision to build the new refinery in the Niger border is informed by the threat posed by militants in the Niger Delta region, what about the threat of terrorists that are swarming the whole of that region of Africa? Besides, how much supply can be expected from a country that reportedly produces only 80,000 barrels of crude oil per day compared to Nigeria’s 2.3 million bpd?

In fact, this is the time for the Nigerian National Petroleum Corporation, the inefficient state oil behemoth, to divest from the downstream sector of the industry to pave the way for competent and efficient private investors with the wherewithal to take over. The Nigerian state has shown over the years that she is not good at managing businesses, as exemplified in her failed attempts to run the steel industry and the losses that have been accumulated by the NNPC in its oil ventures.

Perhaps, it is in partial realisation of this that the government has been encouraging private investors to invest in critical sectors of the economy, especially in local oil refining, where the country, the largest oil producer in Africa, spends billions of naira on refined petroleum products import every day.

It is for this same political reason that it was announced recently that a 248-kilometre-long rail line would be constructed to the same country from Kano in Nigeria. The critical question to ask is, why the obsession with Niger Republic? Why use the scarce resources in an economy that is just recovering from recession – where many of the youths graduate from the university and roam the streets for years without jobs – to go and develop another sovereign state?

It should not be forgotten that, in 2012, the Katsina State Government funded the construction of a government house for the governor of the Niamey region – another profligate step by a state that parades some of the poorest human development indices in the world. The tame reason for this, it was reported then, was to “strengthen the bond of relationship between that country and the state.”

Prospecting for oil and building refineries are lucrative businesses that can easily attract private sector interests. If prospecting for oil in the Lake Chad Basin and, in recent times, the Sokoto and Benue basins, held bright prospects, private investors would have moved in long before now, and Nigeria would not have to spend its scarce resources on that venture. Africa’s richest man, Aliko Dangote, for instance, decided to site his refinery in Lagos, close to crude oil source, simply because he is a businessman and knows where to put his money.

There are many things the government could invest in for the good of Nigerian citizens. The parlous state of the country’s education system is crying for adequate funding. So also is the health sector, which has deteriorated so much that the President had to seek medical care abroad the last time he took ill. Even in the area of infrastructure, there are many areas seeking attention. It is interesting to note that while the money for the construction of the rail line to Niger has been reportedly included in this year’s budget, the proposed rail track from Lagos to Calabar is still pending, just as the Lagos-Ibadan Expressway and other important and economically-viable highways across the country remain in a very poor state.

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