Borrowing For The Wrong Project Is A Foolish Decision!!!!!

One Lesson Other State Governors Should Learn From The Mistake of Rivers State Past & Present Administration

1.With $150 million annual turnover, within a decade investors will recover their capital investment in the building of 1 refinery with a production capacity of 16,000-barrel a day.

2.Since the cost of a refinery plant is between $700 million and $800 million, it will be important to assume that, if a state government decides to invest in building refineries, then there will be a stable economy in the state, on a 7 years projection index.

3.If the state governments run two tenures with an objective of building refineries of the capacity mentioned above, then the state will never borrow money again for infrastructure development, after a period 7 years, within the same regime lasting 8 complete years, for two successive tenures.
4.One note of correction ensues from the foregoing and that is, rather than borrowing $50 billion as the successive Rivers State governments have done under 8 years, without a reliable plan on how to repay the debt spent on infrastructure such as ultra modern primary and secondary schools (good, but too hasty development), monorail technology / transport infrastructure (useful, but wrong timing), road maintenance and repair (volatile spending) and payment of workers (overemphasized necessity), other state governments should rather borrow only $3 billion to construct 4 units of 16,000-barrel a day production capacity refineries that will serve longer-term utility purpose.

5.With 4 refineries costing not more than $3 billion in view of developing the oil and gas industry with a good plan to pay back the debt in a very short time, a state would go out of debt in only 6 years where all 4 refineries operate efficiently.

6.Going out of debt in such a short time frame, any state with four operating refineries will achieve energy independent status along with sufficient cash-flow in the economy.

7.Where this recommendation is considered favorable to any state where it is applicable, like Rivers State where the mistake has been observed, it would even be possible to increase workers’ monthly pay 10 times in compensation for the 6 years of meager pay accepted for the sake of the common good of all members of the state who will enjoy an equal opportunity to feed and live well.

  1. Moreover, with 4 new refineries, the jobless youths will receive training to qualify them for skillful employment in the well paying energy sector to reduce unemployment and make youth restiveness a perpetual tragedy of the past in the petroleum viable state.

9.With ample job opportunities, more money will circulate in the state to raise the standard of living by 200% within the same period of 4 years in the decade of the new reality.

  1. Ultimately, the new reality of being an independent energy state in downstream oil and gas will create abundant wealth in the state that will be enough for the development of other industries and revamping other sectors of the state’s economy without any budget deficit in the next tenure.

These are hard facts anyone can experiment, and if it is true that conceiving a future development calls for experimenting the possibility today, then this is a clarion call for experimenting the development of state owned refineries towards an era of energy sufficiency in Nigeria.

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