New Telegraph

Babalola: It is sad Nigeria still imports petroleum products at 62

Engineer Sunday Adebayo Babalola, a retired Deputy Director of defunct Department of Petroleum Resources, in this interview with SUCCESS NWOGU, speaks on Nigeria’s energy sector and other business issues as the country celebrates its 62nd Independence anniversary

 

 

Nigeria is 62 and is still importing refined petroleum products. Is this not a sad and sorry tale?

 

It is not about age. It is not about whether Nigeria is a petroleum producing country or not. It is about the fact that having gone through several governments, Nigeria is still importing refined petroleum products. Something must have gone wrong. It is definitely not right.

It is not right to be a crude oil exporting country and still be importing petroleum products. It is never right to still be a producer of crude oil and gas and be a net importer of white products that come out of them. It shows a failure of the system. It shows the failure of our past government, including the present one. It is a clear failure.

That is why I believe the youths who are called futures of tomorrow should rise up en-mass and look for the candidate they can trust and vote for him so that we can change this narrative. It is a very sad narrative. We need better management of national resources.

A man born 62 years ago is already a grandfather and yet our country and, indeed, most African countries, have not yet started sitting not to talk of crawling. It is a very sad narrative. It did not stop with petroleum products, it extends to almost every facet of the economy including, agriculture, manufacturing, finance, aviation, etc.

Some people came to Nigeria and took our palm seedl ings, and today they are exporters of palm oil and other palm products. Some countries took other resources from us, developed them and today, they are exporters of those products.

We should not blame it on any external factor. We should not blame it on colonialism. Since we took over government 62 years ago, what have we done with our resources? It is very sad indeed!

There are four national refineries: Port Harcourt refineries, Warri and Kaduna refineries. Regardless of the stupendous amount spent on many turnaround maintenances for many years, they are yet to work. How do you react to the situation where the four refineries are not working?

I do not know how to describe it. You have assets that are wasted, and you continue to service them. It is just like you have a car and you can not service it and you want it to keep working. It will not work. It is g o o d news as the Minister of State for Petroleum said that the Port Harcourt refinery  would start working by December.

December is close by and we will see if it will work. If it works, that will be great news. But if starts working, it will be scratching the surface.

Can the four refineries actually give us the required usage of the white products or the quantity of white products that we need in this country to get the economy moving? Without producing anything, we are consuming everything. Now we have to import these products. It is not a good story at all. The leadership of this country in the last 62 years have failed us.

We were once youths and now we are grandparents and we are still talking about the problems we have when we were youths. It does not make any sense at all. Today, almost everybody has lost hope in this country. Go to any primary or secondary school and ask the children, what will you like to be? Ninety per cent of them will tell you that they want to travel out of the country.

It is a sign of failure of the leadership. Even though they do not know what they will do over there, they just want to go. And these four refineries have been worked on, turnaround maintenance has been done on them many times over the years and they are still not working.

 

The contractors should be arrested, those who awarded the contracts should be arrested, and the money should be returned. It can be done. This is not looking good at all.

 

But the government is hoping that when the four refineries come back on stream and the Dangote Refinery starts operation, importation of petroleum products will stop by 2023 as the Group Chief Executive Officer of Nigerian National Petroleum Company Limited, Mele Kyari, has said. What is your view about this?

You have to remember that Dangote spent money to build his refinery and that means he is in business. He is not a charity organisation. He can decide to export. And that may be the agreement he signed with the government that he can export his products.

Unless, we stop fuel subsidy, and unless government owns the refineries, in which case, they can supply us locally the white products, I do not see an end to the importation of petroleum products because Dangote will want to recoup his investments. He is in business. I do not know if there is an agreement that he must sell locally except they show us that agreement and at what price.

 

So the subsidy will be going to him if he is the one to be supplied to the nation. And if there is no agreement, he will be free to sell outside. If the subsidy is going to him, it is actually like importing the products.

 

Minus the freight, there is no difference. Because if you will still be paying the subsidy, it means you are actually buying at the onshore price.

Nigeria has spent trillions of naira on subsidies for PMS. Is this not misplaced spending?

What should be done? It is absolutely misplaced spending. Are we even sure that the amount they claimed they have spent is even what they have spent? The thing keeps growing by leaps and bounds.

 

What we see is: What is the growth of the users of this product? Has the number of cars increased by those leaps and bounds? Has the number of petrol generators increased by those leaps and bounds? If they have not, why then the increase in subsidy?

 

One may argue that it can be justified by the rising foreign exchange rates. But we learnt that people importing petroleum products have a special exchange rate. If that is true, so  what is the increase all about?

And if that is not true, then there is a failure on the side of the people managing the exchange rate. We need to see the whole picture of what is growing and how that growth is affecting the subsidy. It is also a demonstration of failure in the sense that you keep paying so much on subsidies and you keep lacking in infrastructure development.

You keep lacking in the generation of employment for our teeming youths. You keep lacking in many areas. I do not think that is right. And I think the government should have a rethink of the subsidy. It is totally misplaced for you to keep importing, using the money of your crude oil export, in exchange for the import of the white product.

 

Basically, we are not making any money. They said that it is the amount that they would have given to the refineries that they are exporting for white products. That brings my argument to the fore that even if Dangote will be supplying locally and would be paid subsidy, it is then not different.

 

So as an expert, what should be done?

 

I think the government should have well detailed advocacy on the issue of subsidies. The government should have a discussion with Nigerians and give Nigerians an acceptable explanation of why the subsidy should be removed and that the subsidy is only affecting urban areas, most especially, Lagos, Abuja and maybe a few other places.

 

The government should show the nation how much we are spending on subsidies and what the money should have been used for. The government should explain to the nation, the benefit of those things that the money would have been used for, like the generation of employment, infrastructure provision and development, retention of forex, and other useful things in that manner. When those things are shown to the nation and people buy into it, then you can remove the subsidy.

 

It is politically suicidal today for the current government to insist on removing subsidies as the elections are approaching. I have tried to explain to people fighting that the subsidy should be retained and that they are only fighting for the pockets of a few that are collecting this subsidy.

The government should after good advocacy and getting Nigerians to accept it, remove the subsidy, and inject the money into infrastructure, social welfare services and good projects and programmes. The government, when injecting the money should make sure that people do not steal it because stealing the money is actually sending our children to slavery.

Over 90 per cent of our children in public and private schools in the country want to go outside the country. Again, this is not different from the slavery era when our leaders or the strong in the society, took over hold of our forefathers and sold them to willing buyers. I agree with the white men that if you are looking for compensation for slavery, you need to start from the willing seller.

So we need to go back to centuries where those people who sold them out were. That is exactly what our political leaders are doing today. They steal this money, there is no money to develop the country and the resultant effect is that people are fleeing this country to go to a society that is seemingly more humane. What do they go to do there? The same type of work that people who are sold into slavery would have done for a pittance as remuneration.

You talked of removing subsidy and injecting it well, but there is a deficit of trust in government. How should this be addressed?

That was why I said the govenrment should show fidelity. There also must be accountability. We can get all these things done very clearly.

If somebody is working in a ministry and he has five houses that are worth N500million, we need to ask him where he got the money from. Until people are held accountable, we will just be hypothesizing and theorising. One of the reasons that people voted for President Muhammadu Buhari into power or government is that they had the notion that he is not corrupt and that he was go-  ing to fight corruption.

But he did not do it. Is there any sign that corruption was fought? People, even many years ago, have the notion that Nigerians are corrupt. Is there any sign that the notion has changed positively today? Are some Nigerians not exhibiting corrupt tendencies? We just have to fight corruption and be sincere about it.

 

People have called for a thorough probe of the subsidy regime. Do you subscribe to that?

I subscribe to it.

All the culprits must be brought to the book. But sincerely, the people who are probing, are they corruption free too? It is just a circle. We had some years ago that the House of Representatives was probing. But there was the allegation that the Chairman of the committee, Farouk Lawan, collected about $500,000 bribe in order to exempt a particular company.

When I was in the defunct Department of Petroleum Resources, we made many probes but nothing came out of them. Our papers were very correct and we detailed everything that time and we could defend them. We also defended everything we did. But at the end of the day, nobody took us seriously because we were not ready to part with anything.

There should be a political will to institute a probe, to ensure that the panel is not compromised and manipulated. Also, the outcome of the probe and its genuine recommendations should be applied and executed. The probe panellists should not be picked based on ethnicity, religion or any primordial consideration. They should be people with integrity.

People  who have stood the test of time. They should first be probed. Their assets and how they got them should be looked at. Their integrity must be questioned properly before they can now sit on that probe panel. That will make a lot of sense because their names will be a stake, and they will do a thorough job. There are many of them who are men of proven integrity but they will never allow them to be appointed or if appointed, they will try to manipulate them and the process. They would want people who will dance to their tunes.

They want garbage in, garbage out.

 

Nigeria has been running a deficit budget for many years now. Is this a good financial management strategy?

Any economist and even non-economist will tell you that it is not good.

When you have N10 and you spend N15, there will be a time when the whole thing will collapse. We have seen it happen in many countries that eventually collapsed. I do think that countries are declared bankrupt just like that when they are not.

When they are bankrupt so many other countries can also go bankrupt because there is inter-dependence of countries. You can not continue to run on deficit. Can you drive your car with zero petrol? Is there anything like negative petrol? If you can not drive your car with zero petrol , how do you expect the country to move forward with negative petrol?

Money is the petrol and the livewire. Money is the blood that runs the system. If you are having a negative plug or negative livewire, or negative petrol, do you think that everything will be alright? I do not think so. If we continue this way, the future is bleak.

So what should be done?

Deficit budgeting should be stopped. People who are in govenrment know why there is a deficit budget. Every leakage should be blocked. Corruption should be stamped down, or at least, reduced to the barest minimum. Of course corruption will fight back and they have a lot of money to fight back. That is why subsidy has not been removed because it is fighting back. The people in it are simply fighting back.

Nigeria’s inflation rate in August 2022 is 20.52 per cent. Is the country not sliding into hyperinflation?

We are already there. Today, few people can really afford to pay their bills now. The whole country has been turned into a beggar’s country. Every person is pegging the other person for money thinking that the person has more than they.

Some supposedly rich people receive say ten text messages, nine of them are for people begging for one assistance or the other such as: their children’s school fees, house rent, car repairs, and medical bills. It ought not to be like that. iI everything was working fine, the children school fees will not be a problem.

In the whole Western region, I do not think people were begging for students to go to school. If everything was working alright, the hospital bill will not be a problem because you can easily work into the hospital and get treated instantly.

How should inflation be addressed?

There should be change of attitude. People in government and public offices must manage public resources very well and implement programs that will alleviate poverty. The elected people or government must deliver good governance. People must elect good leaders and managers and those who are elected should start seeing themselves as servants of the people and not that people should be begging them crumbs from their table. The attitude should change across the board. You can propound all kinds of theories.

Men are the ones that run those theories and make them work. If you have the right people with the right attitude, and people with right character are not running their public affairs or managing their resources, you are just wasting your time.

That is why 62 years, we are still not walking. We started with Malaysia, the country is far ahead of us today and Malaysia is a Muslim country ruled by Muslims. So it is not about the religion of the people ruling you.

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