The economy is critical to any society. The welfare of all individuals in any polity is based on the economic performance of that entity. Here, we have a Central Bank that is just experimenting with the economy such that, today, there is anxiety even at household level about Nigeria’s economy. As if that is not enough, a petroleum minister, Dr Ibe Kachikwu, who doubles as GMD of NNPC, is also experimenting with the most strategic sector of the nation’s economy – petroleum — with the apparent implicit support of the “red cap chiefs” of this administration. He clearly mentioned “unbundling” when he started out; then he said it’s “reorganization” when the unions embarked on a strike.
The most dangerous threat to the stability of Nigeria is to continue on this useless experiment which has the potential of uniting what remains of the opposition, corrupt elements who are on the receiving end of the anti-corruption war, under a so-called civil society umbrella. Kachikwu’s impunity is now surpassing that of any before him. Jerry Uwah did a beautiful piece on this entitled “NNPC Unbundling: Kachikwu’s Tactical Blunders” in his Blueprint column of Tuesday, March 15, 2016, I have reproduced it below:
Emmanuel Ibe Ikachikwu has a measure of self-confidence that borders on arrogance. The minister of state for petroleum, who doubles as group managing director of the Nigerian National Petroleum Corporation (NNPC), consequently has a nauseating disdain for consultation and consensus-building.
That dictatorial tendency is to blame for his preponderance of tactical blunders. He runs the mega corporation on the basis of sheer flip-flop management policies.
That probably explains the fact that, almost six months after Kachikwu’s emergence as head of the country’s petroleum industry, no one knows what to do with Nigeria’s cash-guzzling refineries. In the last five months, the minister has floated three different proposals on how to manage the refineries. Yet not one of them has been recommended for final approval of the federal government.
He started with the proposal for the outright privatisation of the refineries. The National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), in apparent self-protection bid, responded to the proposal by roaring like hungry lions. The minister cowered and recoiled.
The next moment he tinkered with the idea of a joint venture with the private sector in managing the archaic refineries. As the proposal was still being considered, the minister of state talked about rehabilitating the refineries to enable them contribute their quota to the jinxed journey toward ending Nigeria’s shameful dependence on imported refined petroleum products.
He set a deadline of 18 months for ending the importation of refined petroleum products and anchored the plan on the ability of the four refineries to operate at full blast. That herculean task has never been accomplished in the last 30 years.
Kachikwu however lamented that even if the refineries were running at 100 per cent of their installed capacities, they would not meet the country’s need for petrol. He argued that the way the refineries were configured, they would only churn out 20 million litres of petrol per day if they were running at full blast.
No one really knows how much petrol Nigeria actually consumes in a day. The general assumption has been that petrol consumption stands at 40 million litres per day.
However, simple economic logic has put a huge question mark on that assumption. The economy was consuming 30 million litres of petrol daily when it was growing at seven per cent per annum. Last year, the annual growth rate dropped to less than three per cent. Yet the fuel consumption rate surged to 40 million litres per day. Kachikwu and the men in the Petroleum Products Pricing Regulatory Agency (PPPRA) are yet to find answers to that puzzle. Everyone believes in it. The government makes its projections on it and the payment of fuel subsidy arrears to the fraudulent marketers is based on that bloated assumption.
Kachikwu’s propensity for tactical blunders came to the limelight during his handling of the laudable plan to unbundle NNPC. He muted the plan some months ago. Everyone expected him to be working on the legal framework for achieving that noble goal, while at the same time discussing the modalities for the plan with NUPENG and PENGASSAN with a view to allaying their fears about job losses.
In reality, no staff of NNPC should be worried about retrenchment except for the fact that it would deprive the affected staff of the chances of taking a rather disproportionate share of the national cake through stealing. NNPC has an outrageous pension scheme. Pensioners earn slightly higher than when they were working. And when they die, their spouse collects the over-bloated pension for life. Workers with such prospect have no business complaining about job loss. But NUPENG and PENGASSAN know what their members gain from remaining in the system. They are consequently jittery about any reform. Kachikwu therefore needed to allay their fears through assurances during negotiations with the unions before ushering in the reforms.
But like all known dictators, Kachikwu is used to doing first things last. He announced the unbundling of the corporation and waited for the unions to respond. They responded by calling an absolutely unnecessary strike that only succeeded in worsening a bad fuel supply situation. Kachikwu opened talks with the unions and gave them assurances that resulted in suspension of the strike after the damage had been done. The lawyer in him came into play as he told everyone that what he did amounted to restructuring rather than unbundling which would require an amendment of NNPC’s enabling Act. He probably forgot that he boasted the previous week that he was poised to unbundle NNPC in a week’s time and that everyone knew that when you sack the executive directors of an organization and introduce the post of divisional chief executives that were not in the enabling act, you need to amend the law to accommodate the new structure. The House of Representatives is angry with Kachikwu.
He did the last things first and threw a distressed economy into unbearable shocks. Someone has to tutor him on the essence off consensus-building and due consultations. The unbundling of NNPC is absolutely necessary. However, it should follow the due process.
History is on the side of the oppressed.
LEADERSHIP
END
Be the first to comment