The Federal government of Nigeria has signed a Memorandum of Understanding for petroleum products transportation and storage with Niger Republic.
This deal was brokered between the Nigerian National Petroleum Corporation (NNPC) and Niger Republic’s Societe Nigerienne De Petrole on petroleum products transportation and storage (SONIDEP).
Apparently being in the making for months, what it entails is that Nigeria will import oil from, and store oil in the Niger Republic’s Soraz Refinery in Zinder, which is some 260km from the Nigerian border.
Niger’s total domestic requirement is about 5,000bpd, but it has an installed refining capacity of 20,000 barrels per day, which in turn leaves a huge surplus of about 15,000bpd, mostly for export.
On the surface, this deal seems reasonable enough. However, with a closer look, you will be able to notice the remnants of terrible decisions a government that ought to put the ‘people first,’ has become accustomed to making.
For starters, the new obsession FG seems to have with Niger Republic is getting increasingly concerning. Recently, the government announced plans to construct a rail line linking Nigeria and Niger Republic, which by the way did not get the vote of confidence from the general public.
Why has the Federal government insisted on building a rail line to Niger, when its proposed inter-state rail projects like the Kano-Lagos rail line, and other rail projects have all been a bust.
The execution of these projects have been extremely slow, yet the Federal government votes a rail track to Niger Republic as being of higher priority.
Secondly, this oil deal with Niger doesn’t seem largely beneficial to the general public. Matter of fact, if the government focused more on fixing its four moribund the refineries, and building new ones where necessary, there would be way more economic benefits to Nigerians than just employing the use of another nation’s refinery, especially one that Nigeria trumps in wealth.
Not only will repairing our refineries increase the market value of our petroleum commodities and solve our perennial domestic petrol challenges, for the reason of being processed here at home. This will also by extension, eliminate processing cost that comes from importing oil, and employ a number of hard working Nigerians which translates to solving some of the country’s employment issues. So, the economic benefit of the FG importing and storing oil in Niger Republic is lost on us.
We also need to ask what happened to the 10 refineries that Vice President of Nigeria, Yemi Osibanjo approved back in 2017. Was it all for show?
In fact, according to a report by the Petroleum economist, a total of 38 licenses have been granted for the construction of modular refineries over the years, but just two have been built.
With such complacency in our oil sector, one would think that the government would be more invested in finding solutions to the country’s oil problems, rather than run away from it entirely; by soliciting the aid of a country responsible enough to build and maintain its own oil infrastructures or is the failure to fix our crippling refineries a deliberate act?
This action by the government also exposes the hypocrisy of the Nigerian government. This administration came up with the ‘brilliant idea’ to promote ‘made in Nigeria,’ goods resulting in a number of challenges, including an astronomical increase in the price of food products.
The government forced Nigerians to deal with the discrepancies of buying home made goods, while enjoying no true advantage. In fact, it was reported in 2019 that Nigeria recorded N338.6 billion shortage of rice at the Malaysian price of $421 per tonne.
Within three months of the closure of Nigerian borders, Nigeria recorded an inflation on food products as high as in some cases, 60% with demand superceding supply. In no time, a bag of rice shot up from N13000 to N25000, a carton of frozen fish jumped from N10,000 to 25,000, and as we’ve seen with onions a 60.8% increase saw the price of a bag, go from N25000 to N41000. One can only guess who bore the brunt of this inflation.
It makes it a bit confusing to the common man on the street why the Nigerian government chose to close its eyes to these problems, and insisted on keeping the borders shut regardless.
Many businesses have suffered as a result, and an already generally poor country were forced to spend a fortune on the most basic of food products. But here, the same government is opening the borders to ease challenges in an escapist manner.
Rather than face and fix the oil problem, the government has decided to seek the aid of a foreign nation, and in the same breadth forced Nigerians to stand and face their problems even to the detriment of the livelihood of millions.