Sell the refineries now!

Fellow Nigerians, debates on issues of national importance are getting more confusing by the day. Building consensus is becoming difficult and what would otherwise seem to be straightforward is now enmeshed in confusion. The Federal Government had announced its policy to hands off the refineries and sell them to private entrepreneurs who will likely manage them more professionally and profitably. The FG even embarked on publications and a road show in support of the privatisation plan. But the National Union of Petroleum and Natural Gas  Workers backed by the Nigeria Labour Congress balked at the idea. Government was forced to swallow its words, denied that it ever contemplated such a move and stopped the proposed sale. A government suffering a credibility deficit could not afford to take on the organised labour and open another battlefront when it had not succeeded on the existing ones.

The labour warned that the privatisation of the refineries would cause more hardship to the masses, adding that Nigerians are bound to react against any bad policy. In its New Year message to workers, it described as unfortunate the poor state of the refineries and advised that the government, instead of selling off the refineries, should provide incentives to attract private refiners to operate side by side with the public refineries. Workers saw the privatisation bid as a ‘smokescreen for distribution of national assets to cronies and political hangers-on’. “It is our view that the selling off of such vital assets as the refineries is a weighty enough issue which should not be embarked upon without an open national debate. Given that the country is in the process of embarking on a national dialogue, the issue should be included as part of the agenda of the dialogue,” it said. On its part, NUPENG specifically expressed its preparedness to mobilise its members for a nationwide strike to resist the proposed sale.

It is however  imperative to review the arguments against the planned privatisation of the four refineries vis-a-vis the actual relationship between these refineries and the life of the ordinary Nigerian. The first is that the government spends and continues to spend hundreds of billions of naira on the turn-around-maintenance of these refineries. Yet, the huge sums spent do not lead to optimum production of petroleum products for the local market or for export.  At the end of the day, through corruption, the pockets of top political office holders and their crony contractors get turned around and the treasury bleeds. At no time in the last 10 years did the refineries operate at 50% capacity utilisation. Money is spent and misused and Nigeria keeps importing petroleum products.  In whose interest is this scenario?

Secondly, the Nigerian National Petroleum Corporation collects 445,000 barrels of crude oil per day, all in the name of domestic refining and affording Nigerians access to cheap and subsidised petrol. This allocation is not tied to the actual refining capacity of the four refineries. But, we are all living witnesses that this allocation is one of the conduits for the greatest fraud of the century. 445,000 barrels of crude oil per day at the average price of $100 per barrel will yield $44.5m a day, which amounts at N160=$1USD, to N7.120billion a day. In a year, the sum wasted amounts to N2.605 trillion. And this is not part of the fuel subsidy that gets appropriated every year by the National Assembly. This sum can pay for building or rehabilitating all the major roads that have been in the federal budget for the last five years. It can also make our universities and polytechnics to compete with the best in the World. Should this waste be allowed to continue? A resounding “no” is the answer.

The argument on the side of labour could be that what is stated above is just an organised fraud and corruption which government exists to stop. This is true, but successive governments in Nigeria have never defined their mandate as such. How many panels have investigated the oil sector? What has happened to the reports and recommendations of these probes? Nothing has happened and nothing will happen. It is a manifestation of the impunity in the land and is not limited to the oil sector. Allowing this window of opportunity to continue makes no sense. My basic religious teaching enjoins me to avoid all occasions of sin. Essentially, this means that we should not provide certified opportunities for fraud to continue.  We need to stop the stealing. We know that workers may be afraid that the privatisation may lead to job loss. This is a legitimate fear and everyone needs to protect his source of livelihood in these days of economic hardship. Unless, there is something known to labour but not known to the public, if production at less than 50% installed capacity can employ, for instance, 100 workers, there is no reason to believe that operations at full capacity will lead to job loss. In the normal course of events, it should lead to the employment of more hands. Unless the refineries are already overstaffed, this fear may be unfounded.

On the issue of selling national assets to cronies, the challenge is more of the lack of effective public oversight and monitoring of the privatisation process to ensure value for money. This challenge is as old as every privatisation process and indeed, there are many instances where this has happened. But this should not be a reason to stop the privatisation process. Nigeria has already privatised a number of sectors including telecommunications and power and there is nothing sacrosanct about the oil sector that stops government from privatising it.  Telling government to continue to hold on to the investments in refineries and to compete with private sector operatives is to encourage governmental oil sector operatives to continue looting the treasury. It is sweet music to ears of the treasury looters.

Taking the foregoing arguments for and against privatisation in context, the central challenge of bad governance and corruption crystallises. If there was no corruption and things were working as they should, privatisation would never have been an option. If government had lived up to its responsibility to investigate and bring to justice perpetrators of corruption, Nigerians would have had  a better standard of living. This brings to the fore the need for collaboration among the major pillars of civil society like the organised labour, media, academia, professionals, religious faiths and non-governmental organisations.

Let us stop defining and tackling small agenda items and intervene only when our immediate interests and constituency are challenged. Let us develop a broad canvass of ideas and interventions that cut across board and this should be based on fundamental principles of good governance and not on any dogmatic ideologies. Let us think big and hold government to account for the big picture of more jobs and improvements in livelihoods.