A former vice president, Atiku Abubakar, has described the decision of the federal government to vote $1.5 billion for the repairs of the Port Harcourt refinery as “suspicious”.
The Federal Executive Council on Wednesday approved $1.5 billion (about N600 billion) for the rehabilitation of the Port Harcourt refinery.
The FEC approved the amount at its virtual meeting held Wednesday and presided by President Muhammadu Buhari.
The approval comes amidst a controversial price increase in the pump price of petrol that was later reversed.
Although Nigeria has four refineries, all government-owned, it currently imports virtually all its refined petroleum products.
The approval has expectedly been greeted with mixed feelings as the country has in the past spent billions of dollars on refinery maintenance. Despite such expenditure, however, the refineries have not worked with many experts calling for their privatization.
In a statement Thursday, Mr Abubakar said the decision was “unwise.”
Read his statement below:
“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 privatise 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”.