Former Nigeria’s vice president, Alhaji Atiku Abubakar, has described the decision of President Muhammadu Buhari’s administration decision to use $1.5 billion to rehabilitate the Port Harcourt refinery as suspicious and unwise use of scarce funds.
The Federal Executive had approved $1.5 billion for the rehabilitation of the 32 year-old refinery at its virtual meeting held Wednesday and presided over by President Buhari.
But Atiku, in a statement he personally signed on Thursday noted that with the current state of the Nigerian economy, the rate of unemployment in the country and the state of the refinery, the decision of the FEC amounted to an unwise use of public funds.
The former presidential candidate of the opposition Peoples Democratic Party, PDP also noted that the funds that will be borrowed for the rehabilitation will add to the already high national debt.
He also said the the cost of rehabilitation of the loss-making refinery was prohibitive, wondering if due diligence was done before the contract was awarded.
He pointed out for instance that 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.
Atiku noted that the Shell Martinez Refinery is more profitable than the Port Harcourt Refinery.
“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,” Atiku said in the statement.
Read his full statement below.
$1.5 Billion To Renovate The Port Harcourt Refinery Is Suspicious At The Least.
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 can 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 an assortment 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 to 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. Indeed 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.
Waziri Atiku Abubakar
Vice President of Nigeria, 1999-2007.