The crude oil-for-loan policy is creating a debt crisis for Governor Obaseki, and Edo APC is silent less than five weeks to the Edo 2024 election. As we approach the Edo 2024 election, the opposition-led APC in Edo State is blaming Governor Obaseki for the federal government’s crude-for-loan arrangement, which is part of the $3.3 billion “pre-export finance facility” facilitated by the Nigerian National Petroleum Company (NNPC) Ltd and arranged by the African Export-Import Bank (Afreximbank) in January 2024. The opposition-led APC in Edo State has, at different times, called the Edo Modular Refinery a scam or an MOU project at a time when the crude oil-for-loan policy is stifling local refineries in Nigeria. I am concerned that the current crude oil production levels cannot sustain Dangote Refinery and other modular refineries due to the crude-for-loan policy, yet Edo APC is blaming Governor Obaseki for the economic crisis in both Nigeria and Edo State.
There are two modular refineries in Edo State that the federal government’s crude-for-loan policy is working against. Look at Edo State, for instance: we have two modular refineries that are not operational—one in Ologbo, Ikpoba Okha, built by the Chinese and the Edo State government, and another one in Orhionmwon. Both of these refineries are completed, but the crude-for-loan policy is preventing them from functioning. If they go into production and add their output to that of Dangote, it would help to address the issue of petroleum product importation.
These two modular refineries in Edo State are supposed to have been functional, but they do not have crude oil to process due to the federal government’s crude-for-loan policy. The two modular refineries in Edo State could disrupt the cabals benefiting from petrol subsidy imports in Nigeria. Edo Modular Refinery would reduce the massive importation of aviation fuel and Premium Motor Spirit, popularly called petrol, which uses U.S. dollars and continues to put pressure on the naira, further devaluing the local currency.
President Tinubu should encourage the commissioning of the two completed modular refineries in Edo State. These refineries have the capacity to end the importation of petroleum products in the South-South region of Nigeria and eliminate fuel subsidies in the region. They will soon start operations if they are given crude oil to process. We expect President Tinubu to commission them shortly. These projects will enhance fuel sufficiency in the country and alleviate the suffering of Nigerians across various sectors. Projections suggest that some of their products will be exported to boost foreign exchange earnings. Once they expand their operations into different phases, these refineries are projected to meet more than 80% of Nigeria’s diesel requirements. The investment is also expected to benefit Edo citizens through job creation, increased revenue, and reduced pressure on other refineries.
The Nigerian National Petroleum Corporation (NNPC) has borrowed an additional $2 billion in crude oil-backed loans from international creditors to boost its financial inflow.
In addition, Mele Kyari, the Group Chief Executive Officer (GCEO) of the NNPC, informed Nigerians that the national oil company is in discussions with international creditors to raise an oil-backed credit facility. This follows the recent revelation that the national oil company is struggling to pay international oil traders a backlog of $6 billion amid subsidy removal. Kyari stated that the credit facility would help boost the company’s finances and allow for further investment in the oil and gas sector.
The current challenge in Edo State is how to manage the mass migration into the state, particularly from the North and the Middle Belt, which is a problem stemming from federal government policies. Yet, Edo APC remains silent. Edo has become a land of hope; the people of Edo are now proud to be from Edo.
The events of April 7, 2021, will not be forgotten anytime soon by those who think about the progress of the country and those who believe in speaking truth to power in Nigeria. On that day, Governor Godwin Obaseki of Edo State took the bold step of raising the alarm about the financial crisis confronting the country. During a meeting with transition committee members at Government House in Benin City, the Edo State capital, Obaseki said Nigeria was in severe financial trouble due to alleged money printing to fund shortfalls in allocations shared among states. Today, we are facing that economic reality in Nigeria.
He also expressed concern about the nation’s excessive borrowing, noting that the debt profile could rise to N16 trillion by the end of 2021. The governor, while lamenting the situation, claimed that the Federal Government had printed an additional N50 billion to N60 billion to top up the Federal Accounts Allocation Committee (FAAC) for states to share. Three presidential jets belonging to the Federal Government of Nigeria have been seized by a Chinese company over debts.
The opposition APC in Edo State calls Governor Obaseki the “MOU Governor,” but the people of Edo State will always remember Obaseki’s legacy projects, which include the Edo Modular Refinery, the ongoing Benin River Port, and the CCETC-Ossiomo Power Plant, among other infrastructural projects executed to boost the state’s economy and improve the livelihoods of Edo citizens. The 5,500 barrels per day (bpd) Edo Modular Refinery is completed; the 55 MW CCTEC-Ossiomo Power Plant is also completed; the ongoing Benin Enterprise and Industrial Park is under development; and preliminary work is ongoing on the Benin River Port, among other legacy projects led by the Obaseki administration. The Edo Production Center, an industrialization program located along Benin’s Sapele Road axis, where Small and Medium Enterprises (SMEs) operate, is another key project. The Ossiomo Power Plant is intended to attract investments into the state, improve the power sector, and create competition in the power supply industry.
Governor Obaseki is also working to return Nigeria to its status as one of the world’s leading palm oil producers. His Edo palm oil programme, which engages more than eight palm oil companies, aims to boost Nigeria’s global palm oil production, currently at 73.23 million metric tonnes. Governor Obaseki is supporting major palm tree plantation owners in Edo State, who have large industrial estates, to expand Nigeria’s palm oil production. These companies include Okomu Oil Palm Plc, Presco, Agri-Palm (FMN), and others. The major oil palm holdings in Edo include publicly quoted companies like Okomu Oil Palm Plc and Presco, as well as private companies such as SIAT, Agri-Palm (FMN), and Fayus Oil Palm Plantation. Ovia North-East provided 25,329 hectares of land; Ovia South-West contributed 36,759 hectares; while Orhionmwon and Uhunmwode provided 51,000 and 23,000 hectares of land, respectively, for the expansion of palm oil production in Edo State. Okomu Oil and Presco are actively expanding their plantations in Edo.
These projects are expected to influence the outcome of the Edo 2024 election, which the PDP is set to win.
Inwalomhe Donald writes via [email protected]
