In continuation of the interview last week with Ehiedu Iweriebor , a professor at the Department of Africana and Puerto Rican/Latino Studies, Hunter College, The City University of New York. He spoke on the need for the Federal Government to formulate policies that would promote crude oil refining in Nigeria, in a bid to attract investors into a more industry-friendly clime. Excerpts:
There was a report recently in the media where an expert sees Dangote Refinery becoming a threat to European refineries. How is Dangote Refinery going to pose as threat to these foreign refineries? Do you think there may be any form of sabotage?
The fact is that the completion and take-off of the Dangote refinery will have a decisive impact on Nigeria’s international business interactions because it will fundamentally restructure Nigeria’s relationship with all oil suppliers. Because of this new situation of relative national self-sufficiency, it is a fact that the Dangote Refinery is likely to be seen as a threat to some European refineries and other economic sectors for various reasons. First, the foreign refineries that have held Nigeria captive by supplying refined products of uncertain quality to the country for over 20 years would lose this large market. Second, they may have to close down if Nigeria is their primary market.
Third, jobs are likely to be lost in these refineries. In general, it is likely to affect the economic wellbeing of the parts of Europe that create jobs for themselves through exportation of poor quality oil and poverty to Nigeria. For me, it is very clear that the Dangote refinery is actually going to have broad revolutionary impact on Nigeria’s economic conditions. The Dangote refinery and its related chemical projects are what I call “Freedom Projects” because they will lead to the restructuring of Nigeria’s economic relations with foreign countries that have held Nigeria in captivity and economic disempowerment since colonial domination.
The plants will reduce Nigeria’s import dependency, its vulnerability to external pressure and also empower the country to begin to generate its own prosperity through the production and export of value-added goods rather than raw materials export. Secondly, and practically it means that Dangote refinery can supply refined oil to Nigeria and to parts of Africa. It will detach these regions from the dependency on Western suppliers for expensive and critical fuel supplies. When it does this, it would have many positive consequences including the promotion of the processing of local natural endowments for various industrial uses.
The plant will contribute to employment generation through the establishment of large numbers of new petrol stations where Dangote petroleum products will be sold across Nigeria, West Africa and other parts of Africa. You can imagine the amount of employment that would be created by this project. Regarding the recent write-ups even before they appeared I had always advised and counselled that a project of this nature has to be protected against technical and economic sabotage as well as psychological warfare. For me, the write-up about the refinery becoming a threat to European refiners is like a whistle blown that the sabotage will take-off now or is in progress already.
Nigerians have to realise that any liberatory economic projects undertaken to advance autonomous national development and African freedom are threats to the Western assumption of the normalcy of their domination, exploitation and control of the world. Therefore such projects may be vigorously resisted and overtly or covertly sabotaged and prevented from coming to fruition.
So, the Dangote Group has to be extra vigilant against things like that. The onus is on us as a people and country to actively own, protect this refinery and prevent any plots and efforts to ruin this and similar freedom projects. Nigeria refineries have not been able to produce up to full capacity despite gulping several billions of naira on Turn Around Maintenance.
Some people are calling for the scrapping or privatisation of the ailing refineries. What should the Federal Government do with the nation’s refineries?
As for me, I don’t believe in privatisation and I don’t think they should be scrapped. I think this is an opportunity for a proactive and patriotic Ministry of Petroleum Resources and NNPC to embark on the building of the endogenous capacity to repair and maintain plants and to produce components and spare parts specific to these refineries. The problem with the refineries is not that TAM cannot be done effectively; it is simply because they are aged. The models and blueprints which were used to manufacture these plants are now out-dated. If we had a proactive nationalist and not internationalist NNPC, which has a chemical engineering subsidiary, this company will be able to produce spare parts and components specific for these old refineries.
Historically, refineries with adequate and continuous maintenance can actually last for a very long time in most parts of the world and they can keep functioning for 50 and even more years. The fact of the matter is that you cannot run a dependent modern technology-based economy with advanced industrial plants like refineries that requires foreign exchange for its routine functioning. That means in essence, that all parts and components that you need have to be imported and you will need foreign exchange to be able to import.
This type of condition makes you a hostage to the other countries. Imagine if we had a proactive NNPC, which had actually promoted the emergence of a diverse and robust national chemical engineering industry years ago; these refineries would have been maintained and repaired with parts made by Nigeria’s indigenous engineering companies. But as it is now, quite disgracefully, NNPC is asking the original equipment manufacturers to handle the Turn Around Maintenance. But these companies probably no longer make those models of components and spare parts any more. The suggestion on scrapping and privatisation of the refineries does not address the fundamental issues which is the lack of national technological capacity for the repair, maintenance and manufacture of chemical engineering projects.
Privatization will not solve this primary problem. I think we as a nation have to make an effort to avoid easy, diversionary and counter-productive solutions that are foisted on us by so-called foreign experts.
Many companies that obtained licenses from the Department of Petroleum Resources (DPR) to set up refineries have not been able to do so partly due to lack of fund. How do we solve project funding challenges in Nigeria?
I don’t think the challenge has to do with funding. I believe it is more because of racketeering, abuse and exploitation of opportunities. You see, when people are given licenses to establish refineries, they are also given specific allocations of crude oil as incentives to enable them accumulate the capital or funds to build the refineries. Very often, they sell this crude oil and use the resources to do something else and they keep complaining about the issue of finance.
Finance for investments is a challenge for business everywhere in the world and if you are a capitalist, your business is to mobilise finance from various sources to fund your projects. So, you cannot say finance is the problem; therefore you are not doing anything about it. We cannot allow this type of argument or reasoning to become ascendant and becloud issues. I also blame the government for allowing this situation to exist.
For example, if you have been giving licenses in the past several years and only one company has been able to make progress in project construction, why do you keep giving them licenses if you are not involved in some dubious activities. I believe people issuing these licenses are also involved in the racketeering with some recipients. That is why I said we should avoid easy solutions and begin to deal with the problem from the source.
A lot of the excuses offered on this matter of refinery licenses are very inaccurate and misleading. My position on the establishment of any industry or the industrialization of Nigeria remains the same. We must adopt the strategy of creating the foundation industries for industrial development – that is a national machinery and equipment manufacturing industry for all sectors. Without this capacity, and Nigeria’s absolute dependency on the importation of machinery and equipment, the country’s development will remain insecure, expensive and captive to the uncertain availability of foreign exchange. In the same way, if we are serious about establishing refineries whether conventional or modular, we must develop the technical capacity to make refineries.
What is your assessment of the Federal Government’s support to the industrial sector? Do you think Government is doing enough for the development of the sector?
I don’t really think that there is serious or effective support from the Federal Government to the industrial sector in general. The Federal Government doesn’t really have proactive policies, strategies or programmes for national industrial development. Even the so called national Industrial Revolution Plan is not a serious strategy document of industrial advancement because it has no provision for an endogenous prime mover – the national machinery and equipment o engineering sector– for its actualization. The enabler provided in the document is “foreign investments and investors”.
This exocentric option cannot be serious proposition by a serious government. Therefore the Federal government’s position is anti-industrial development in fundamental ways. What exists today as policy, strategy and actions on industrial development is just a pale and denuded copy of what we used to have from independence. If you look at Nigeria’s industrial development strategies between the 1970s and the 80s, you will note that efforts were made to build catalytic industries that will make it possible for Nigeria to become responsible for its industrial development and self-propulsion and build an advanced industrial society.
However, from the mid-80s, with the country’s subordination to the multilateral imperialist Structural Adjustment Programme (SAP) dogmas what you find is that industrial development was relegated to the background and even abandoned. Under the various principles of SAP, there was no room or provision for national industrial production and if you look very carefully, you will be struck by the fact that since the days of SAP national development agencies, leaders and bureaucrats never ever or rarely ever talk about industrial development. They speak of MSME development. But these small and medium enterprises depend on large-scale industries and are not originators of industrialization and therefore cannot by themselves lead to advanced industrial development.
Source: Vanguard
