POLICY initiatives for Nigerias oil and gas sector, outlined at the just-concluded 20th World Petroleum Congress in Doha, Qatar, envisage old-style public sector participation in areas of the economy where private capital could perform best. In its totality, what Petroleum Resources Minister, Diezani Alison-Madueke, presented as a five-year plan for the countrys oil and gas sector is an incoherent package anchored on revisionist principles of state capitalism.According to Alison-Madueke, a capital outlay of $130 billion has been earmarked by the Federal Government for projects ranging from oil and gas pipelines (covering 2,000 kilometres), gas utilisation and (liquefied petroleum gas) evacuation facilities to fertiliser manufacturing plants, a petrochemical complex and crude oil processing plants. Under the plan, the petrochemical plant is to be built at Koko, Delta State, while three refineries are to be sited in Lagos, Bayelsa and Kogi states.Foreign investment is expected in engineering design and related services, petroleum engineering services, fabrication and construction, pipe mills, equipment leasing, civil works, logistics and haulage, as well as hospitality services for construction workers. These are largely support services, meaning, private investors have been consigned to roles that are at best complementary, as in the era of public sector dominance in key sectors of the economy.It is instructive that the Minister has unveiled such an ambitious plan at a time that the Petroleum Industry Bill that is intended to restructure the oil and gas industry and refine the outdated fiscal regime (instituted by the Petroleum Act, 1969), has been stalled at the National Assembly. Without the PIB, oil multinationals have been extremely reluctant to commit to new investments in Nigeria. The Federal Government also appears to have lost the initiative in that regard. What is evidentand regrettably sois that the government is prepared to resume massive investments in the type of projects that had failed the nation (and precipitated an ill-managed privatisation exercise), even while glibly affirming a preference for private investors.The National Fertiliser Company of Nigeria, Onne, Rivers State; Eleme Petrochemical Company, also in Rivers State, which have long been privatised, and the Federal Superphosphate Fertiliser Company, Kaduna, are testaments to a failed vision. Those firms, which were among some 600 public enterprises that had gulped about $100 billion, as of May, 1999 (according to the National Council on Privatisation), are sad reminders of how inefficiency, under-utilisation and monumental corruption have remained so pervasive in the public sector of Nigeria. The NNPCs four refineries, at Kaduna, Port Harcourt and Warri, with a combined installed capacity to process 445,000 barrels of crude per day, have been cesspits of corruption. The refineries, which have been largely non-functional from the mid-1990s to date, also exist as relics of public sector dysfunction, reminding the nation of how ruinous it would be to channel scarce resources to the establishment of public enterprises.By its own admission, NNPC says aged parts, infrequent Turn Around Maintenance and activities of the saboteurs are the main reasons why the refineries are not working. What magic will Alison-Madueke then perform to change the governments destructive approach to business' In the introduction to its privatisation policy, released in 1999, the NCP stated in part: public enterprises have woefully failed to perform the functions and attain the objectives for which they were set up. With such a conclusion by a major organ of government in which the Vice-President is the chairman, it is surprising that the Federal Government still seeks to plunge anew into investments of the sort.The National Assembly has a constitutional responsibility to protect the ship of state any time the vision of the executive becomes blurry, as is apparent at the moment. It should be guided by the woeful record of public enterprises in Nigeria and the bizarre twists in the privatisation exercise (which greatly deepened the economic losses suffered by the nation), whenever proposals are forwarded to it for appropriation in respect of the ill-advised investment plan. Not even proposals for public-private partnerships should be entertained as the Federal Government could flaunt such a business model to disguise its real intentions for state control.To allow the private sector to play its proper role as the leading engine of growth, as envisaged by the NCP, does not have to be a mere slogan, but backed by concrete action. Prospective investors want to see well-thought-out policies (and a commitment to consistency), dependable infrastructure, an effective legal system, minimum corruption, and internal security, before they can channel their resources into investments and wealth creation in Nigeria.
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