WHY THEY DELIBERATELY REFUSED TO PRIVATISE THE REFINERIES, FULLY DEREGULATE THE DOWNSTREAM OIL AND GAS SECTOR AND REMOVE THE CONSUMPTION SUBSIDIES.
The Central Bank of Nigeria based on report from Bloomberg, has unofficially devalued the naira to N380/$1 and merged the multiple exchange rate markets into one. A policy move we pleaded with them to pursue since June 2015.
For a country , whose foreign reserve is almost overstretched to its limits, as a result of its over dependence on crude oil exports revenue; (a commodity, whose average market price has plummeted atrociously way below her budget benchmark). One would have expected the leadership of Nigeria to shed off their cloak of irrationality and obstinate stand, and take the urgently needed right policy steps for once.
But unfortunately, they did not and may not take those steps .
What would have been the right expectations from a rational government now ?
What should be the rational policy steps to take now ?
One of the biggest consumers or sources of the depletion of our forex earnings /reserves are the imports of white petroleum products and food items into Nigeria .
Nigeria wastes annually over $10bn to $13bn in the importation and subsidization of the white petroleum products.
We waste these funds because over the last 4 years, we have been unable to fix the 3 obsolete refineries or privatize them to deep pocketed or capable investors to scrap and replace.
Our maximum rulers have refused to do the right things. They refused to embrace rationality, not even after squandering over $389million in failed Turn Around Maintenance, TAM program on the refineries and misappropriation of additional N398billion as losses incurred to keep/retain this unproductive assets under the control of the NNPC over the last 4 years.
Nigeria annually squanders over $11bn in the imports of food and agro commodities. Food and agro commodities we can easily produce here.
We have not been able to truly diversify the economy to enable us cultivate , produce and process the foods we consume here domestically, because of our penchant to pursue lies , ineptitude, propaganda, audio production and legalized fraud in execution of agro intervention schemes.
WHY HAVE ARE HOLDING TIGHTLY TO THE OBSOLETE REFINERIES ?
WHY HAVE THEY DELIBERATELY AND OBSTINATELY REFUSED TO FULLY DEREGULATE THE DOWNSTREAM OIL AND GAS INDUSTRY ?
WHY HAVE THEY CONTINUED TO RETAIN THE CRIMINAL CONSUMPTION SUBSIDIES REGIME ?
These guys in Aso Rock and the NNPC have refused to deregulate the market and allow transparency.
They know that if they fully deregulate the market just like we have it in the other sectors like telecommunication , banking etc that their fronts and conduits for misappropriation of our commonwealth cannot thrive again. They also realise that their conduits will not survive in a free and transparent oil and gas market .
They know that if they had privatized the obsolete refineries in 2015/ 2016, deregulated the market and removed the subsidies, that before Aliko Dangote would have completed his refineries in Ibeju lekki (Which they are using to massively deplete our foreign reserve at very subsidized rates ) that 20 other modular refineries would have sprung up in the coastal waters of the south south and south west to cover up our domestic demand capacity.
Their reasoning is simple; if the market is fully liberalized and made transparent with the subsidies fully taken away and then multiple modular refineries spring up in Nigeria, to which domestic market will Aliko Dangote refinery control ? They want to create a virtual monopoly , who they will also hand over the 445,000 barrels per day crude that are reserved for the existing obsolete refineries.
They know what they are doing. However, it is their ignorant hailers, who are being deceived
They want to continue to retain the subsidies, so as to hold everyone down and allow advantages to the smugglers and other underhand players. Who are the smugglers of petroleum products across the borders ?
Why is Nigeria the only country in west africa that is still subsidising the white petroleum products?
But what they forgot is that as they continue to hold down this country to enrich a few of the privileged class , mass poverty continues to multiply in their backyard amongst the masses.
They also forgot that if they sell off the refineries now , remove the consumption subsidies, fully deregulate the oil market and sell down the holding of the FGN through the NNPC in the JVs with the IOCs and other upstream operators, that our foreign reserve will experience less pressure because of the fresh inflows that it will receive.
The transparent opening of this key sector will send the right signals to honest foreign direct investors , who will bring in New investments into the upstream, midstream and downstream sectors of our oil and gas industry.
My prayer and fast objective this season is for the crude oil price to remain at below $30 per barrel till December 2021. This is the only way, the hands of this cabal will be forced to do the right things they had deliberately refused to do since May 29, 2015.
God help us
Dr Nnaemeka Onyeka OBIARAERI, FICA, MIRA
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