Local refining: Key to global emergence for Nigerian economy (3)

The way forward

By Sunny Chuba Nwachukwu

Coasting home, “do not put all your eggs in one basket”. This wise counsel is a word of wisdom, and an economically viable strategy, for survival and sustainability, amidst hostile situations and circumstances because, “no condition is permanent”.

In Nigeria’s oil & gas sector of the economy, an optimal balance needs to be struck between upstream and downstream operations. Presently, in the international oil market, the tumbling and plunging of oil prices, to unimaginable all-time low figures, came as an impact of the COVID-19 pandemic lockdown measures by nations. This is why we need to always strategically play safe, and be proactive; both in our short- and long-term economic planning. Part of planning is to always prepare for the ‘rainy day’. As can be seen from how COVID-19 has struck, and turned everything upside down, globally. Forward planning is vital, as well as prompt response; being a survival mechanism and key to economic crisis control. The sustainable future of fossil fuel at this critical time actually requires the use of intelligence to recognise extreme uncertainties, in the light of the obvious unfavourable propositions, from modern scientific findings and innovative technological applications towards alternative energy sources. The above, of course, in its merit, is an informed advice based on Competence, Expertise and Wisdom.

In my line of thought as a strong advocate for “Local Refining” of petroleum products, we need to depend largely on what we produce locally, as a nation. I allign with the economist, Tope Fasua, who advances the argument for trying something new and radical, by being proactive. In other words, changing pattern of action. In his own words, “the more we produce for ourselves the more competitive we are in international markets when globalisation resumes”. Now, COVID-19 Pandemic has fast tracked globalisation, from all indications. The impact has already dealt a terrible blow on many economies, with the decline in crude oil prices. Equally, beyond this, the demand shock has shortened supply chains of consumer activities, as a result of lockdown.

Based on the above stated facts, the Global Competitive Index Report on Nigerian economy before the external observers presently, can only spring surprises if Nigeria strategically shift her focus to downstream sub-sector of the hydrocarbon industry, and change our pattern of trade internationally. Nigerian economy equally needs now, to have a strong footing in the scheme of things on the global stage; as everything appears to be starting afresh globally. Very sincerely, we ought to fundamentally transform our economic structure through manufacturing because, that is the strong base of any economy.

What are our big players in the oil industry waiting for? Our high net worth individuals/entrepreneurs need now to mobilise themselves, in a way, for Joint Venture arrangements with joint efforts, and take up the challenge for the task ahead in the downstream oil sector. I challenge the likes of Orient Petroleum Resources (OPR) to respond to this clarion call in no distant time, with their modular refinery in Anambra State. The CBN Governor, Godwin Emefiele’s 27 paged charge, “Turning the COVID-19 Tragedy into an opportunity for a new Nigeria” of 14th April 2020 is very apt.

Our economic strength lies in the “rod in our hands”, our endowed abundant natural resources in the oil and gas sector. This is where we can effectively display and competitively manifest the professed ‘economic prowess’ to the entire world by the principle of comparative advantage. With two simple steps, we will get there. (1) Productive process and (2) Commercial process, through a chain of distribution in the entire 15 nations within the ECOWAS Sub-region and other African countries in sub-Saharan Africa.

Having traversed the entire West coast by road, I have a first-hand experience that, refined petroleum products are hotly sought consumables, on a daily basis. PMS (for example) is an essential commodity that is sold to automotive drivers along the entire roads that link the West Coast (through both formal/filling stations and informal/roadside dealers), for sustainable daily economic activities in the society. Otherwise, everything gets grounded to a complete halt!

I can only be a voice in this advocacy, an eye opener for prospects, who might be ignorant of the attractiveness and positive feasibility that shows a low business risk, once the investor can afford the investment capital to float the business venture. But would venture into this noble investment, by my simple practical business survey/analysis (in the above narratives that would also be professionally substantiated hereafter).

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Nwachukwu, a graduate of pure and applied chemistry with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce.

Sunny Chuba Nwachukwu (FICCON, LS)

Onitsha, +2348033182105