For Nigeria, a country that has abandoned its nature-endowed agriculture, solid minerals and human capital endowments and basking in the fiscal euphoria of easy-to-get petrol dollar earnings for decades, the time to explore the opportunities availed by the latter for national development cannot be more apposite than now.
The current realities show clearly that the country is in dire strait of socio-economic crisis with crude oil revenues plunging to the worst level in decades and government’s funding needs rising exponentially as years of fiscal mismanagement continue to vitiate efforts to position the country on the path of sustainable, people-oriented socio-economic development.
Whereas other oil exporting countries, including relatively low producers like Angola, are translating the potential of their petroleum resources to concrete development strides, the case of Nigeria remains lamentably pathetic as it continues to falter in the drive to make oil its hub of its socio-economic and political development.
Today, gross inefficiencies characterize the Nigerian hydrocarbon resources industry with the capacity to meet local demand for refined products lacking, fuel importation becoming impossible for marketers and private investments just as proactive policies to grow the sub-sector remain inadequate.
This is even as the usual bickering over the management of oil revenues, including the actual ‘cost recovery’ on imported petroleum products by the Nigerian National Petroleum Corporation, between the Executive and Legislature continues to accentuate by the day as politics now pitches each arm of government against another in the frenetic race for the 2019 general elections.
As the country continues to grasp with multi-faceted challenges of development in the face of diminishing oil revenues and increasing cost of fuel importation, one of the critical issues calling for urgent attention and proactive solution by the fiscal authorities is the need to stop fuel importation and by so doing, reduce avoidable leakages in public finance across the country.
It is saddening to note that despite billions of dollars being spent on the nation’s refineries yearly with a view to optimizing their operations, the result of such investments remains minimal as the country gropes yearly with inefficient products’ pricing regime that makes it practically difficult for private marketers to do business in the subsector today.
Currently, the nation’s four refineries’ capacity stands at a mere 450,000 barrels per day (bpd) while the daily consumption volume is officially put at 45 million bpd, indicating a huge gap in the supply-demand link. While the NNPC has been doing its best to sustain fuel availability at huge cost to government, the need to further open the downstream market to private investment is long overdue.
Although the past administrations have tried to open the sub-sector for improved private capital over the past years without much to show for such efforts in real development terms, achieving the objectives of the policy and investment initiatives is still raising concerns among industry experts and the citizenry as Nigeria still remains a primary fuel import-dependent country.
The implications of this economic lapse for the nation’s sustainable development have been huge as wastages that are associated with fuel importation have denied the county the socio-economic benefits and other development gains. Today, Nigeria is a poor country as unemployment, poverty and insecurity describe the state of the nation.
With the 2019 elections just few days away from now, we strongly feel that one of the options open to the government in achieving fiscal efficiency, bridging the yearly budget deficits and tackling the above problems is to meet local demand for petroleum products by improving the downstream sub-sector’s fiscal regime and the enabling environment for competition.
Interestingly, the Dangote Petrochemical refinery and 10 other modular refineries currently being funded hold good promises for improved efficiency in the downstream sub-sector and fiscal efficiency, we believe that translating the various projects’ potential to national economic gains requires a political will that has been lacking over the years.
This is where the in-coming President, whoever emerges from the February election, should prioritise in policy formulation and implementation with a view to ensuring that Nigeria no longer imports fuel but become a net exporter of refined products to the global market. This is our clarion call!
To do otherwise will be tantamount to leadership ineptitude and an invitation to anarchy in a land well endowed but largely mismanaged through greed and incompetence of past leaders in the country.