The controversial sale of the Port Harcourt Refinery during the twilight of President Olusegun Obasanjo’s administration in 2007 continues to generate debate, particularly regarding its legality and ethical implications. Senior Advocate of Nigeria, Femi Falana, has shed light on the circumstances surrounding the sale and its subsequent cancellation by the succeeding administration of President Umaru Musa Yar’Adua, asserting that the transaction was marred by procedural irregularities and a disregard for established legal frameworks. Central to the controversy is the allegation that Obasanjo bypassed the legally mandated authority of the National Council on Privatisation, chaired by the Vice President, in orchestrating the sale.
The Privatisation and Commercialisation Act clearly stipulates the role of the National Council on Privatisation, headed by the Vice President, in overseeing the privatization of state-owned enterprises. Falana contends that Obasanjo, in contravention of this Act, marginalized then-Vice President Atiku Abubakar and personally managed the privatization process, including the sale of the Port Harcourt Refinery to a consortium led by Aliko Dangote. This alleged usurpation of authority raises serious questions about the transparency and legitimacy of the transaction, especially given the significant national interest at stake. Falana’s assertion underscores a critical point of contention: whether the sale adhered to the established legal procedures governing the privatization of public assets.
The consortium involved in the acquisition, Bluestar Oil, comprised Dangote Oil, Zenon Oil, and Transcorp. The sale, finalized just days before Obasanjo left office, involved a 51% stake in the Port Harcourt Refinery for a reported sum of $561 million. Adding to the controversy, Falana points to Obasanjo’s alleged personal investment in Transcorp, a member of the acquiring consortium, through a “blind trust.” This raises concerns about potential conflicts of interest and further fuels questions about the propriety of the transaction. The timing of the sale, occurring in the final days of Obasanjo’s presidency, also contributed to the widespread suspicion surrounding the deal.
The sale of the Port Harcourt Refinery was met with immediate and widespread resistance from various stakeholders, most notably labor unions representing workers in the oil and gas sector. The National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) publicly criticized the sale, alleging a lack of due process and undervaluation of the refinery. They argued that the $561 million price tag was significantly lower than the refinery’s actual worth, estimated at $5 billion, suggesting that the nation was being shortchanged in the deal. Their concerns resonated with public sentiment, which was already wary of the privatization process.
The unions’ discontent culminated in a four-day nationwide strike in June 2007, effectively paralyzing the Nigerian economy. The strike’s impact underscored the gravity of the situation and forced the government to take notice. The industrial action was eventually called off after the government pledged to conduct a thorough investigation into the privatization process. This investigation, initiated under the newly installed Yar’Adua administration, ultimately led to the cancellation of the sale of both the Port Harcourt and Kaduna refineries. The government’s decision to annul the sale signified a recognition of the flaws in the privatization process.
The cancellation of the sale by President Yar’Adua, based on the findings of the investigation, effectively vindicated the concerns raised by the labor unions and other critics of the deal. Significantly, the decision was not challenged in any court, further suggesting that the original sale lacked a solid legal foundation. This lack of legal challenge strengthens the argument that the privatization process was indeed flawed and not in line with the existing laws. The entire episode serves as a cautionary tale highlighting the importance of transparency, due process, and adherence to legal frameworks in the privatization of public assets, particularly those of strategic national importance. The controversy surrounding the Port Harcourt Refinery sale remains a relevant case study in the ongoing debate about privatization in Nigeria.
