Beautiful strides from the echoes of the past

Imo State Governor, Senator Hope Uzodinma

On Saturday, 11 November 2023, the Imo state governor, Senator Hope Uzodinma won the election for his second tenure, according to the Independent National Electoral Commission. So far, none of those who embarked on the gubernatorial race with him has gone to court to refute the results of the election. Perhaps, this would be the first time in the history of the state that this is happening and it is a good example of the trust Nigerians should have in their electoral institutions. When the electoral umpire is said to be independent, politicians should allow it to retain that independence and not rush off to the judiciary when election results are announced, thereby creating the impression that the election officers cannot be trusted and giving the judiciary an unmerited opportunity to be the final determiner of who sits in a public office. In more advanced democracies, you scarcely see the parliamentary arm depending on the judiciary to make the final pronouncement of who sits in the public office. No politician ever goes to court to contest the results of an election once the electoral umpire has declared the winner. That is the extent the people trust their electoral institutions.

Meanwhile, there are two important areas the state government would want to clarify for the good people of Imo towards the end of the first and the start of the second tenure of Mr. Hope Uzodinma’s government. These areas were captured in eye opening interviews by the Special Adviser to the State Governor on Public Enlightenment, Prince Eze Ugochukwu.

One area has to do with the WalterSmith Petroman Modular Refinery Project situated at Ibigwe, in the Ohaji-Egbema Local Government Area of Imo State.

During a recent visit to the refinery site by the Minister of State for Petroleum Resources, Heineken Lokpobiri, and the Executive Secretary of the Nigerian Content Development & Monitoring Board (NCDMB), Engr. Simbi Wabote, the Chairman of Waltersmith Group, Abdulrazaq Isah, disclosed that Waltersmith Refinery was targeting 40,000 barrels per day (bpd) crude oil capacity. He said the refinery was already moving from 5,000 bpd to 10,000 bpd.

Isah emphasized the need for collaborative efforts between the private and government organisations in order to advance the nation’s energy sector. Talking about Waltersmith Refinery, he said: “We are moving from 5,000 to 10,000 barrels of crude oil (bpd) a day but our focus is on achieving 40,000 bpd capacity. Already, we are engaging all necessary parties especially the national oil company, Nigerian National Petroleum Company Ltd NNPCL, to ensure that we have access to enough feedstock that will enable us get to the 40,000bpd capacity. That is where we are headed and our co-investor, the NCDMB, is happy with what we are doing.

Lokpobiri had pledged his full support for the expansion plans of Waltersmith Refinery, and voiced his admiration for the progress achieved by Waltersmith Refining and Petrochemical Company. Lokpobiri said: “The shortest way to addressing our problem of low in-country refining capacity is modular refineries and that is why I am here to see things for myself. I am very proud of what I have seen. I also want to encourage Waltersmith and pledge my full support towards their expansion plans so that we can solve the energy problem of our country.”

The business unit of the Waltersmith Group, the Waltersmith Refinery and Petrochemicals Company, is the largest modular refinery in Nigeria that has so far been commissioned. The refinery project, being developed in phases, has made significant contributions to Nigeria’s refining capacity. The refinery project is being developed in phases by Waltersmith Refining and Petrochemical Company, a subsidiary of Nigeria-based Waltersmith Petroman Oil.

Waltersmith Refining and Petrochemical Company is a joint-venture between Waltersmith Petroman Oil (70%) and the Nigerian Content Development and Monitoring Board (30%). Waltersmith was granted a license by Nigeria’s Department of Petroleum Resources to establish the refinery in June 2015 and received the construction approval in March 2017. The final investment decision (FID) on the phase one refinery project was reached in September 2018.

The phase one refinery development with an initial capacity of 5,000 barrels of crude oil a day (bpd) started operations in November 2020. The groundbreaking ceremony for the expansion of the refinery to 50,000 bpd capacity took place in November 2020. The modular refinery is intended to reduce the import of petroleum products by Nigeria. It is situated near the Ibigwe marginal field flow station. The Waltersmith modular refinery comprises a crude distillation unit, tank farm, and other related facilities. The modular refinery with an initial capacity of 5,000bpd is expected to deliver 271 million litres of refined petroleum products a year. The crude oil storage capacity of the refinery is approximately 60,000 barrels.

Subsequently, the refinery is planned to be expanded in phases to have a 20,000bpd crude oil refining facility and a 25,000bpd standalone condensate refining facility taking the total processing capacity to 50,000bpd. The refinery receives feedstock from the Waltersmith-operated Ibigwe marginal field. The petroleum products produced in the refinery include diesel, naphtha, heavy fuel oil, and kerosene. Africa Finance Corporation agreed to provide debt finance of approximately £26.5m ($35m) for phase one refinery development in July 2018. Velem was awarded an engineering, procurement, and construction (EPC) contract for the initial 5,000bpd modular refinery project in April 2018. Velem is a joint venture between US-based VFuels and Nigeria-based Lambert Electromec.

Ibigwe is an onshore marginal oil field located in Oil Mining Lease (OML) 16 in Imo State, Nigeria. The field is operated by Waltersmith Petroman Oil which holds a 70% stake, while the remaining 30% stake is held by Morris Petroleum. Waltersmith was awarded the Ibigwe field in the first Nigerian marginal oil field licensing round in 2003.

Earlier, OML 16 was operated by Shell Petroleum Development Company, while Waltersmith entered into a farm-out agreement with Shell and its partners to become the field operator in 2004.

Waltersmith installed an early production facility (EPF) at the field in March 2007 and achieved an average production of 500 bpd in 2008. Subsequently, the EPF was upgraded to a flow station with 15,000 bpd capacity. The field’s production stood at approximately 6,000bpd in 2018

Eze Ugochukwu, the Special Adviser the Governor Uzodinma on Public Enlightenment had a chat with a prominent son of Ohaji-Egbema Local Government Area, Chief Ejike Lucky Chukwu concerning Waltersmith and the Ohaji-Egbema community. Chief Chukwu, an experienced professional in the Nigerian and International Oil and Gas sector expressed his views on pressing issues. Chukwu is the Group Managing Director/ Chief Executive Officer of Mega Drill Nigeria Limited and a native of Ohaji-Egbema LGA in Imo State. Excerpts from the interview:

Q: Only recently, the Minister of State for Petroleum (Oil) Sector, Senator Heineken Lokpobiri was in Imo State where he commended Waltersmith Petroman Ltd for the Ibigwe, Ohaji Egbema Modular Refinery Project. As a citizen of that LGA, what is the importance of having such a project in your area?

A: The presence of WalterSmith in our area is a welcome development. It is expected to create employment for our suffering youths. I believe that their activities will improve the economy of the area and Imo state generally, considering the value chain created from the engagement of new vendors, distribution of the products, supplies etc. within the area. However, I expect that the government of Imo state will encourage the company to always consider the host community’s priorities as primary, according to local content laws of the Federal Republic of Nigeria relating to job employment, contracting and subcontracting activities.

Mr Lucky Chukwu
Q: How beneficial can such a small processing plant be for Imo state in general in terms of investment attraction and other value chains?

A: The emergence of Waltersmith will greatly increase the IGR of the state. It will generally put Imo at the forefront of all oil and gas activities in Nigeria. It will also reduce fuel scarcity in the state because this refinery is expected to first serve the needs of its immediate catchment area.

Q: The Imo state government has pledged to continue to provide the enabling environment for businesses to thrive in that area which includes the proposed oil and gas free trade zone. How important is this pledge to the industry players?

A: I believe that the onus is on the government to drive the process aggressively to a conclusive end. The government of His Excellency, Senator Hope Uzodinma has opened a big chapter in Imo state through proposing a free trade zone in the Oguta axis. My prayer is that the government should do everything possible to birth this idea for the common good of the people in the oil-producing area and the economy of Imo state in particular.

In a related development Prince Eze Ugochukwu confronted the state commissioner for Budget on what the state government is up to in the 2023-2024 budget year.

Q: What are the top priorities for the upcoming 2024 budget?

A: The top priorities of the 2024 budget are numerous but few illustrations will suffice. Let me first inform that the 2024 budget will deepen the 3-R agenda of the administration of Governor Hope Uzodimma. The budget will focus on the top priorities of reconciliation, rehabilitation and recovery, for the benefit of Imo citizens. There will be greater emphasis on the general infrastructure development such as new road constructions and the rehabilitation of older ones that link various communities and towns across the state. This will involve a network of rural roads.

The agricultural sector will also benefit in the budget plans. With emphasis on nutritional programmes and a high yielding variety of seedlings in addition to accessing the network of rural roads, Imo farmers will be left with a drastic reduction in the cost of transportation of products to market places within the state.

The education sector will gain as well. Greater emphasis will be placed on elementary, secondary and tertiary institutional structural development.

The health sector will gain too. Greater emphasis will be placed on high technological diagnostic equipments and support for early detection of diseases and treatment. We are also emphasizing child care improvement and free health care programs for civil servants and indigent citizens. All these sectors will experience higher levels of socioeconomic re-engineering that will uplift Imo citizens’ wellbeing to an enviable position, in comparison with other states in Nigeria. In a very crucial way, the 2024 budget can be said to be a victory budget for Imo citizens in many important areas of their lives.

Q: How will the budget address the needs of Imo people?

A: You probably already know that since the commencement of the administration of Governor Hope Uzodimma in 2020, all the state budgets have been benchmarked on the Community Needs Analyses. The Community Needs Analyses are programmed in a document christened “Charter of Needs”. And this is one of the critical documents that State Fiscal Transparency, Accountability and Sustainability (SFTAS), a World Bank program requires in the evaluation of Imo state’s budgetary compliance.

The Imo state budgetary compliance is based on the requirements of SFTAS which is probably one of the best in Nigeria. Therefore, it is a proven fact that the 2024 budget is in compliance with the needs of Imo people, the simple reason being that, the people participated actively in drawing up their needs which are captured in the Community Charter of Demand, a foundational document for the 2024 budget preparation. The 2024 budget in a nutshell, is the budget of the people by the people for the people. The budget serves the democratic needs of the Imo people, as illustrated.

Imo State Commissioner for Budget, Dr. C.C. Osuala

Q: What measures will be taken to ensure fiscal responsibility?

A: This is a decent question. Every discerning mind in Imo state knows that Governor Uzodimma is widely recognised as the most responsible fiscal governor the people of Imo state have actually had in the state’s 47 year history. I can substantiate this statement with copious evidences. In the first instance, Governor Uzodimma’s administration is the first to engage Imo state in the Fiscal Transparency program of the World Bank, SFTAS. It was under Governor Hope Uzodinma’s government that the first citizens’ budget book which admitted Imo state into the World Bank’s Fiscal Responsibility program was authored, published and accepted by the World Bank. Four editions of citizens’ budget books have been published continuously for four years. All this emphasizes the level of Imo State Fiscal Responsibility.

No prior administration since the creation of Imo state in 1976 can make such verifiable claims. It was Governor Uzodinma’s administration’s Fiscal Responsibility policy that started earning million dollar grants (free funds) to Imo state government through the World Bank’s SFTAS program. Cynics are at liberty to approach the World Bank for verification, if need be. The essence of these empirical evidences is to emphasize authoritatively that Imo state is already practising Fiscal Responsibility compliance since the inception of Governor Uzodimma’s 3-R administration. In addition, it may interest you to know that the Institute of Chartered Accountants of Nigeria (ICAN) gave Governor Hope Uzodimma an award as the most prudent Fiscal Responsible Governor of the Year 2023 in Nigeria.

Q: How will the Budget impact economic growth and development in Imo State?

A: The 2024 budget is all about growing Imo state economy in a responsible, conducive, inclusive and peaceful environment. The 2024 budget takes youth empowerment in Imo state into active consideration in such areas as acquiring or updating digital skills which help in entrepreneurial startups, spread out in practically every nook and cranny of the state. The 2024 budget seriously emphasizes importance of Imo youth getting involved in the activities of the ministries of agriculture at state and local government levels, education, health and the Works Department. These are pointers that the second coming of Governor Uzodimma through the landslide victory of Imo people’s wish at the polls is a signpost for good things in the offing for Imo citizens in areas of economic development.

If I may speak for the 3-R administration, I will inform you that all the programs are geared towards empowering Imo citizens economically. Despite the daunting challenges, Imo is getting better. As you know an old adage says: “An idle mind is devil’s workshop”. The budgetary provision for youth programmes in the state is an indication of the government’s commitment to strengthening the economic development of Imo state. All these great economic initiatives will, in turn, encourage local and foreign investors to invest in the state. But it is also necessary that we remember, “Rome was not built in a day”.

Q: What steps will be taken to ensure transparency and accountability in the budget process?

A: The 2024 budget process instituted steps in transparency and accountability in line with the World Bank SFTAS budgetary quarterly performance reports. In exercising the implementation of the 2024 budget, each quarter budget performance report is based on transparency and accountability mechanism. The Ministry of Budget, Economic Planning and Statistics Monitoring and Evaluation Unit has cognizance responsibility to collect data from all ministries, departments and agencies (MDAs) of Imo state government as to their level of budget estimates compliance on monthly basis.

When MDAs’ data have been collected and collated, the ministry of budget does the data analysis, in line with the World Bank template to evaluate levels of MDAs’ budget implementation and by extension, the state’s compliance – and report same to SFTAS program. The World Bank SFTAS Department, in conjunction with Open Government Partners (OGP) make their independent verification assessment on the quarterly report submitted by the Ministry of Budget, Economic Planning and Statistics. After proper analysis of the budget performance report by SFTAS, quarterly grants are awarded to Imo state government based on the budget performance for result. This transparency and accountability reporting instituted by the World Bank and religiously followed by Governor Uzodimma’s administration, is another creative and innovative method of internally generated revenue (IGR) for Imo state government.

Q: What is the plan for managing public debt?

A: The most efficient and effective plan for managing public debt is avoiding profligacy of scarce fiscal resources. The watch word is “Prudent”. The 3-R administration’s approach to public debt management is based on appropriation of public funds on the programs that government considers best for citizens’ wellness, with components of Return On Investment (ROI). A typical example would be when the 3-R administration builds quality hospitals. In turn, the citizens use the hospitals when they are ill. They pay for the treatment and services rendered at the hospitals by physicians and nurses. The state recoups its investment funds used in building the quality hospitals. Some portions of recouped funds will be classified as “Capital Investment Returns” or “Principal” and others as “Profit”. Simply put, the above example can be used as strategic plan in the reduction and management of debt profiles, especially if this school of thought is applied as a “general principle” to guide the state expenditure portfolio in all MDAs. This is the hallmark of the 3-R administration in Imo state. Of course, the regular mundane method is, all the previous administrations locust years expenditures are deducted at source through FAAC payments to the state by the Federal government debt management office. This mundane method may as well reduce the debt profile of the state but it also stifles its economic growth.

Q: How will the budget address issues of poverty and inequality?

A: The 2024 budget has made reasonable provisions to address issues of poverty through the Ministries of Humanitarian Affairs, Youths and Sports, Women and Vulnerable Affairs. The Ministry of Humanitarian Affairs is in charge of national cash transfer program to poor and vulnerable households (PVHHS). The PVHHS is guided by globally acceptable classification which applies the World Bank template on citizens’ qualification for the program. A case in point: when Senator Hope Uzodimma became governor, the handover notes and information received from the state operation coordinating unit registrar depicted that from 2010 to 2019 the number of PVHHS captured in Imo state was only 10,500.

Yet, from 2020 to 2023 the number of PVHHS captured was over 155,000. The import of these statistics is glaring. In layman’s parlance, the more you identify the poor and vulnerable citizens, the more help they can access from the World Bank. The federal government provides the funds on monthly basis through the state’s transparent disbursements to the PVHHS in all the 27 Local Government Areas in Imo State. In this case, poverty and inequality are being tackled and reduced. The detailed and comprehensive data collection and collation used in rapidly identifying the PVHHS in Imo State under the 3-R leadership is ameliorating economic inequality in the state through a transparent budgeting system, benchmarked on proper and verifiable statistical data.

Q: Are you satisfied with the performance and realization of the 2023 budget?

A: The fact that the 2023 budget performance in Imo state is rated excellent by local and global financial institutions is heartwarming to both objective observers and economic participants. Also, let me add an addendum to that. There is no human endeavour that is perfect. It is not the case of take my words, the fact that the World Bank through its SFTAS program rated Imo state ‘excellent’ in all nine disbursement-linked indicators used in measuring all states budgetary performance, anchored on transparency and economic deliverables, is a credible indicator of satisfaction. I have quoted the World Bank Authority as ‘Gold Standard’ in the sense that the World Bank backs her rating with millions of dollars in grants through SFTAS to states that are performing satisfactorily, economically. This is a rather strong economic indicator.

Equally, it does not diminish the real economic challenges being faced by all and sundry globally and Nigeria is not an exception. It is on record that the 3-R administration ably led by Governor Uzodimma has earned for Imo state over thirty million US dollars through transparent fiscal management of Imo state fiscal resources. The ICAN equally gave Imo state a clean bill of economic health, through their fiscal responsibility award to Governor Uzodimma this year.

The citizens of Imo state spoke their minds on 11 November 2023. The gubernatorial election spoke volumes through the landslide victory and mandate they gave to Governor Hope Uzodinma. The landslide victory took into consideration the 3-R administration’s economic performance.

My personal opinion is that we are not yet there. There is still ample room for improvement in the economic livelihood of the state. That is part of the reason Imo citizens voted overwhelmingly for Governor Hope Uzodimma to continue the good work he started. Imo people are satisfied and as an Imo citizen, I am equally satisfied. All the economic institutional authorities at both local and foreign levels are satisfied. The best economic years are still ahead though. But for now, the hope of economic improvement among Imo citizens can only be found in the good roads and pathways created and consolidated by Hope, their immutable governor.

Prince Eze Ugochukwu
Interview by Prince Eze Ugochukwu, Special Adviser to Governor Uzodinma and edited by Emeka Asinugo, veteran journalist, author, and publisher of ROLU Magazine (Website – https://rolultd.com