15 August 2018, Sweetcrude, Port Harcourt — About a fortnight ago the federal government floated the idea in the press that it planned the construction of an oil refinery valued at $USD2B in Katsina State. As the federal government owns and manages the oil and gas deposits and businesses in Nigeria, there is no doubt that it is within its jurisdictional purview to plan the construction of another refinery notwithstanding that the existing ones in Port Harcourt, Warri and Kaduna have been mismanaged and are operating at levels far less than their installed capacity. It is not therefore whether the federal government is imbued with sufficient authority to make this call that is the subject of this piece but whether this call is a profit-oriented one within the context of the surrounding circumstances.
And what are the surrounding circumstances? The world is adapting fast to renewable and environmentally friendly sources of energy and is deliberately phasing out fossil fuels. Every research and development effort by the oil majors and oil producing countries are in the direction of renewable energy sources. Incredible results are being made with wind, solar, steam and plant sources such as sugar cane. Driving around European cities, one can see electricity charging points that have been installed for the use of owners of hybrid and electricity vehicles. Coming closer home, Nigeria already has four refineries which have been undermined and brought to near ruin by the bureaucracy of its owner/operator, the Federal Government of Nigeria. In case you don’t know how this has worked, it takes about four months to communicate the NNPC, the approving authority over all the refineries, about damages, repairs and replacements of operational parts in the refineries. Apart from escalating the cost of spares from desk to desk, it takes the NNPC about another four months or more to debate the justification for the repair or replacement and making provision of funds in the same slow channel of approvals. And when it manages to work at some minimum capacity, the refinery in Kaduna is supplied crude oil by pipelines that are vandalised frequently. The Federal Government has been advised by a thousand and one investment experts to divest of its ownership of the refineries and allow private owners driven only by profit, to turn around the fortunes of the refineries.
This is Africa, the continent that still wallows in ethnicity and tribalism; the continent in which a leader must appease his immediate home constituency with a notable project or come home to a stoning party. Without excusing the proposed fall of Nigeria’s most touted anti-corruption crusader into this ugly tradition, Muhammadu Buhari can do better for the people of his Katsina State, the proposed location for the new refinery project, by releasing the same amount of funds proposed for the Oil Refinery to the farmers and business community of Katsina State through a secure investment stream that makes Katsina State the new locale for the production and refinement of sugar cane into alcohol, the renewable strain that is earning Brazil and other countries smart energy money. In the pursuance of the broader objectives of such an investment folio, a sugar cane refining plant could be constructed by well-funded private investors to serve the farmers and sugar cane producers in Kaduna State and indeed that region that is famous for high-level agricultural activity.
The progression to renewable energy is a certain one that will neither indulge nor excuse Nigerian denial and lethargy. The Federal Government should sensitise and incentivize the private sector into robust investments in clean energy as we must face the challenges of consumption if not export in the near future. It is for the achievement of such an end that we encourage the Federal Government to channel its planned investment in an oil refinery into a prudently managed clean energy portfolio supervised by smart private investors for the actualisation of a sustainable production base for the production of clean energy in Katsina and in all major agricultural centres of Nigeria.