Assets or Liabilities-The Warri, Kaduna and Port-Harcourt Refineries?

Reports that the refineries produce nothing, generates no income but spends billions annually calls for a rethink on their viability and state ownership-Kelvin Kagbare reports

Mele Kyari, GMD, NNPC

The Nigerian National Petroleum Corporation, NNPC, is hardly in the news for cheerful reasons. From 1977 to date, NNPC has served the interests of the Nigerian elites much more than the ordinary citizens of the country.

Recent reports that its refineries in Warri, Kaduna and Port-Harcourt have consistently been incurring huge operational loses only strengthened the position and view of many Nigerians calling for the scrapping of the Corporation.

Warri refinery

The man who said he would sell them off given the chance definitely knew what he was talking about.

Few days ago, members of the National Assembly cautioned the Department of Petroleum Resources, DPR, over meagre remittance of N44.5billion into the Consolidated Revenue Fund in 2019 out of N2.4trillion generated.

It is public knowledge that the NNPC, in its Monthly Financial and Operations Report for December 2019, stated that its Kaduna Refining and Petrochemical Company, KRPC incurred total expenses of N65.255 billion in 2019 even as it generated zero revenue.

kaduna refinery

To think that management staff of these refineries, receive their salaries, go on training courses abroad, incurring humongous expenses on the populace is not only an open endorsement of indolence but a stamp of approval that you don’t have to work hard to earn a living in Nigeria.

The Group Managing Director of the NNPC, Mallam Mele Kyari, has given reasons why Nigeria has not been able to fix the refineries after decades of trying.

In Kyari’s words, “We couldn’t fix our refineries and that’s very difficult to explain. Why can’t we fix our refineries? We started this very many years ago. For 20 years, all attempts to fix the refineries failed for very simple reason, there is a strategy problem”.

Strategy Problem? What does that mean if not another excuse?

When you spend more than you earn, indebtedness and many other social ills afflict you-which is what is happening to Nigeria at the moment.

Debts

With issues on China loans and sovereignty clause raging, Nigerians have cause to worry even as internal and external debt profile of the country raises concerns.

Director-General of the Debt Management Office, DMO, Patience Oniha, assures that there is no cause for alarm with regard to the total debt profile (foreign $27.6b, Local N15trillion) of the country.

According to her “Concerns have been expressed about the growth in Nigeria’s debt stock since the exit from the Paris and London Club of Creditors. It is true that the public debt stock has grown, it must be recognized that the current debt stock is the result of cumulative borrowings by successive governments to finance budget deficits and various infrastructure projects.”

The Deputy Chairman of Senate Committee on Local and Foreign Debts, Senator Muhammad Enagi  Bima, APC, Niger South, said borrowing had always served as veritable financial platforms for many countries of the world in running their economies.

He however notes that “The consequence of these borrowings is that the sheer magnitude of the Nigeria’s Annual Debt Servicing put at about N2.47 trillion for 2020 makes the provision of basic but essential amenities and infrastructure in the country almost impossible without further borrowings. Clearly, Nigeria needs to get its public finance in order to avoid the potential fiscal and financial crisis ahead of the nation”, Senator Bima said.

Unemployment

The Nigeria Bureau of Statistics, NBS, recently released startling statistics on the rate of unemployment in Nigeria.

The NBS said Nigeria’s unemployment rate could reach 33.5 per cent by end of 2020.

Commenting on the development, Senator Chris Ngige, Minister of Labour and Employment, said the increase of unemployment in the country was alarming.

Chris Ngige, Labour Minister

In his words “It is a worrisome status as the global poverty capital (World Bank, 2018); and concomitant high prevalence rate of crimes and criminality, including mass murders, insurgency, militancy, armed robbery, kidnappings and drug abuse, among others. As if this situation is not scary enough, it is projected that the unemployment rate for this country will reach 33.5 per cent by 2020, with consequences that are better imagined, if the trend is not urgently reversed”.

Gambling

To get by, Nigerian youths have taken to gambling and any other available means to wealth for survive.

Reports have it that Nigerians spend $2 billion annually on bets or 300 Naira ($0.78) every day.

According to reports, one young man named Uchenna Akachukwu reportedly committed suicide after losing a $60 sports bet in Uyo, police reports earlier this year stated while in 2018, police in Ilorin, Kwara state, confirmed that a 25-year-old man killed himself because he lost a bet.

A psychologist, Dr. Aimua Cole, is of the view that betting and gambling could lead to laziness, loss of professional interest, depression, addiction, loss of jobs, failed relationships and severe debt.

Mr. Olusegun Temilola of the Sociology department in the Faculty of Social Studies, University of Lagos, said that those who indulge in betting are simply toying with their future in the name of pursuing overnight wealth.

From Noi Polls, analysis of results revealed the quest for quick money (30 percent), Unemployment (21 percent) and greed (15 percent) topped the list of reasons why Nigerians engage in betting.

Other reasons why Nigerian take to gambling include; ‘to cushion the effect of economic hardship’ (12 percent), poverty (10 percent), just for fun (5 percent), passion for sports (5 percent) and peer group influence (2 Percent).

Dangers ahead

Poverty and unemployment are deadly twin evils which, ignored by successive government in Africa have led to crimes and unrests across Africa countries.

Drug abuse, human trafficking, immigration by any means/route possible, prostitution are among the problems African leaders are grappling with because they have failed to manage their resources equitably.

Robberies, kidnappings, agitations and numerous social vices are becoming regular occurrences within the West African territory and beyond. Are the leaders aware?

If Nigerian refineries could produce at 50% installed capacity and the amount spent importing refined petroleum products deployed on infrastructure development, the effect on the Nigerian economy would reduce the high unemployment status and make life more meaningful for her citizens.