There are no plans yet to privatise Nigeria’s ailing refineries, at least not for the 2020 fiscal year, meaning that the importation of refined products with the attendant subsidy cost, which has eaten up so much of revenue meant for distribution amongst the three tiers of government, will remain.
The Nigerian National Petroleum Corporation (NNPC), operators of the nation’s four refineries with a combined template of 445,000 barrels per day (b/d), put their output at a mere 5.55 percent as at May last year.
Besides, after much denial under the guise of over-recovery, the federal government finally admitted to the huge subsidy burden it was carrying, and in the 2020 budget, earmarked about N450 billion to subsidise the importation of Premium Motor Spirit (PMS), popularly called petrol.
Since the administration of former presidents Olusegun Obasanjo and Goodluck Jonathan, the Federal Government has continued to procrastinate about selling off some of its major assets, including the refineries, to raise funds to meet electoral promises.
Rather, the government prefers to keep going a-borrowing, locally and offshore, to the extent that there are now increasing concerns about Nigeria’s ability to pay up its debts, currently put by the debts Management Office (DMO), at over $85.390billion or N26.215trillion as at September end 2019.
The decision to hang on to the almost-moribund refineries emerged yesterday, in Abuja, when the Bureau of Public Enterprises (BPE), unfolded its Year 2020 plan of action and revenue projection.
Also, gone with the wind was the Executive’s plan to sell off her joint venture oil and some other key assets to raise funds to finance the budgets, as neither the refineries nor these assets are included on the list of items billed for privatisation in this financial year.
From the BPE list, a total of 20 entities are to be sold off this year, on anticipated revenue of about N266.852 billion fund operations and part of Government’s deficit financing.
Speaking at a news conference, yesterday, the Director-General, BPE, Alex Okoh, explained that these major assets were not listed, because the Bureau did not receive instructions to that effect, declaring that such critical assets must get directive from the ‘top’.He said: “You know those kind of assets are very sensitive and you must get instruction from above before you start their transactions. We have not received any instruction to that effect.”
Meanwhile, all the Nigeria Integrated Power Plants (NIPPs), are among the national assets listed for sale this year.Assessing some of the privatised entities that were doing badly, Okoh identified Government’s fiscal policies as a major drawback for their inability to perform.For instance, he cited the automotive industry where a number of vehicle assembly plants were privatised and are yet to resume activities because Government was still offering waivers for importers of vehicles or spare parts, which make the locally assembled ones very expensive, compared to the imported ones, which was killing investment in the sector.As a result, Okoh called for the realignment of some of Government’s policies to help drive investment in-country.