Newspaper Review by Peace Oluwadara, AJALA

FG to rehabilitate three refineries to boost local production of LPG[1]

Policy Issues: Institutions, Economic Growth and Development.

The Federal Government has reportedly stated that it will rehabilitate the Warri, Port Harcourt and Kaduna Refineries to achieve local production of 360,000 MTPA of Liquefied Petroleum Gas, LPG, by 2023. Disclosure of this intention, was made by the Minister of State for Petroleum, Mr Timipre Sylva, who was represented by his Technical Adviser on Gas Business and Policy Implementation, Mr Justice Derefaka, at the Nigerian LPG Summit 2019. According to Derefaka, the move is part of the Federal Government’s National Gas Policy. Mr Michael Kelly, Deputy Managing Director, World LPG Association (WLPGA), also added that the organisation would support the efforts of the government to increase and improve gas utilization in Nigeria.

Though the vision tarry…

From the National Development Plans, the Structural Adjustment Program (SAP), the National Economic Direction Plan (NEDP), the National Economic Empowerment and Development Strategy (NEEDS), to the National Poverty Eradication Program (NAPEP), and several innumerable others[2], down to the most recent of them all, the Economic Recovery and Growth Plan (ERGP) 2017-2020; the ‘vision’ for development and economic growth has more than tarried.

“…the Plan outlines bold new initiatives such as ramping up oil production to 2.5mbpd by 2020, privatising selected public enterprises/assets, and revamping local refineries to reduce petroleum product imports by 60% by 2018.”[3]

According to the Economic Recovery and Growth Plan 2017-2020, the Federal Government set out to increase refineries’ local production capacity by rehabilitating and revamping existing refineries.[4] In 2015, the downstream sector accounted for just 0.3% (US$1.35 billion) of the country’s GDP.[5] Despite the existence of four refineries in the country, with a total installation capacity of 445,000 bpd, all four have operated far below each of their installed capacity.[6] The turnout in 2015 was particularly so low that the government accordingly had to import US$7.83 billion worth of refined petroleum that year alone.

In 2016, Africa’s largest economy and biggest oil producer fell into terrible recession, its first in over two decades, which was largely as a result of low crude prices and militant attacks on energy facilities in the Niger Delta, as crude sales reportedly constituted two-third of government revenue.[7] In seeking to recover and rise fast from the fall, the Nigerian government came forward with an answer; or at least thought it did. In high hopes of aggressive growth and zeal to achieve same within the shortest time possible, the Ministry of Budget and National Planning birthed its “Economic Recovery and Growth Plan” (ERGP)[8] in March 2017 with a long line of ambitious projections and extrapolations, intended to restore the economy and take it further than its prior state. In March 2018, Nigeria’s oil firm NNPC, was reportedly in the final stages of talks with two consortiums for the revamping of its dilapidated refineries,[9] a major goal it had set out to accomplish in the ERGP document[10].The first two years within which the plan ought to have seen implementation have gone by, and third gradually ebbs away, as this is its eleventh month; yet, the Federal Government is still at the stage of saying “it will rehabilitate the Warri, Port Harcourt and Kaduna Refineries to achieve local production of 360,000 MTPA of Liquefied Petroleum Gas, LPG, by 2023”[11]; It is ‘good’ to know that we have a new due date – 2023.

In Dani Rodrik’s In Search of Prosperity, he cites Indonesia and Pakistan as countries that have over time, struggled to achieve sustained economic growth owing to ineffective public institutions.[12] This may in fact, not be far from being the Nigerian narrative. According to North, in Third World countries, telephone systems that do not work, the inability to get spare parts, endless production interruptions, long queues/ delays to get permits and product variability, are overwhelming evidence that an effective institutional infrastructure does not exist. Might we add to the list, delayed implementation of development policies, plans and strategies? What actors in the Nigerian Governance space, may need to understand, is that institutional growth, no matter how minute and gradual, keeps the society healthy, self-sustained and ensures accountability. In the words of Dambisa Moyo, “economic stress creates the conditions for political upheaval and, at the extreme, the breakdown of liberal democratic institutions”[13]. It thus goes without saying, that the problem is not a dearth of the right policies and regulatory framework, but the vision flag-bearers and the people who neglect to demand accountability. It may appear as though the various leadership administrations paint hopes and coin vision slogans for the people to make them hand over power as electorates, fully assured that questions would go unasked and inefficiencies unquestioned.

Nigerians seem to be obediently adhering to Habakkuk 2:3 (KJV) which instructs thus: “For the vision is yet for an appointed time, but at the end it shall speak, and not lie: though it tarry, wait for it; because it will surely come, it will not tarry.”[14] Decidedly ignoring the apparent oxymoron (though it tarry which is side by side it will not tarry), the wait for it seems the more puzzling and unclear directive. As succinctly put by Aristotle and later by Parmenides, ex nihilo nihil fit, nothing comes from nothing. Dismally however, both the leaders, and the led inclusive, stay sitting and waiting for a supreme divine intervention, as though the vision was set by their divine implacable will, and for Him (if he can be so addressed), to implement. It is interesting to see what becomes of this seemingly idle wait, should it persist; perhaps, 2023 may become 2026, and the vicious cycle wheels on till it arrives at a critical juncture, a turning point. Till then, the trending approach seems to be to wait for it.

 

[1] This article was taken from The Punch Newspaper. Available at: https://punchng.com/fg-to-rehabilitate-three-refineries-to-boost-local-production-of-lpg/. Date Accessed: 28/11/2019.

[2] ProjectWriters; National Development Plan And Planning From 1968 Till Date; The Nigerian Experience. Available at: https://www.projectwriters.ng/national-development-plan-and-planning-from-1968-till-date-the-nigerian-experience/. Date Accessed: 28/11/2019.

[3] The Ministry of Budget and National Planning; Economic Recovery and Growth Plan 2017-2020. Available at: https://yourbudgit.com/wp-content/uploads/2017/03/Economic-Recovery-Growth-Plan-2017-2020.pdf. Date accessed: 28/11/2019.

[4] Ibid.

[5] PWC; Nigeria: Looking beyond Oil. Available at: https://www.pwc.com/ng/en/assets/pdf/nigeria-looking-beyond-oil-report.pdf. Date accessed: 28/11/2019.

[6] Anthony Ogbuigwe; Refining in Nigeria: History, Challenges and Prospects. Available at: https://link.springer.com/article/10.1007/s13203-018-0211-z. Date accessed: 28/11/2019.

[7] Reuters, Bond news; Update 2 – Nigeria Returns to Growth in 2017 After Recession. Available at: https://www.reuters.com/article/nigeria-gdp/update-2-nigeria-returns-to-growth-in-2017-after-recession-idUSL8N1QH26Y. Date accessed: 28/11/2019.

[8] The Ministry of Budget and National Planning; Economic Recovery and Growth Plan 2017-2020. Available at: https://yourbudgit.com/wp-content/uploads/2017/03/Economic-Recovery-Growth-Plan-2017-2020.pdf. Date accessed: 28/11/2019.

[9] Julia Payne, Libby George; Nigeria in Final Talks with Firms to Overhaul Refineries. Available at: https://af.reuters.com/article/investingNews/idAFKCN1GB1UT-OZABS. Date accessed: 28/11/2019.

[10] The Ministry of Budget and National Planning; Economic Recovery and Growth Plan 2017-2020. Available at: https://yourbudgit.com/wp-content/uploads/2017/03/Economic-Recovery-Growth-Plan-2017-2020.pdf. Date accessed: 28/11/2019.

[11] The Punch Newspaper; FG to rehabilitate three refineries to boost local production of LPG. Available at: https://punchng.com/fg-to-rehabilitate-three-refineries-to-boost-local-production-of-lpg/. Date Accessed: 28/11/2019.

[12] Dani Rodrik; In Search of Prosperity. Available at: http://assets.press.princeton.edu/chapters/s7518.pdf. Date Accessed: 28/11/2019.

[13] Dambisa Moyo; Edge of Chaos. Available at: https://www.kobo.com/us/en/ebook/edge-of-chaos-1. Date Accessed: 28/11/2019.

[14] King James Version (KJV); The Holy Bible. Habakkuk 2:3. Available at: https://www.biblegateway.com/passage/?search=Habakkuk+2%3A3&version=KJV. Date accessed: 28/11/2019.