Human rights lawyer and Senior Advocate of Nigeria, Femi Falana, has shed light on former President Umaru Musa Yar’Adua’s decision to cancel the sale of the Port Harcourt refinery to a consortium led by Dangote Oil.
Falana described the reversal as a necessary step to address legal and ethical concerns surrounding the transaction and to safeguard Nigeria’s national interest.
Legal Breaches in the Transaction
In a detailed statement, Falana explained that the Privatisation and Commercialisation Act designates the Vice President as the chairman of the National Council on Privatisation (NCP), the body tasked with overseeing the privatisation of public enterprises. However, Falana alleged that former President Olusegun Obasanjo bypassed this requirement, sidelining then-Vice President Atiku Abubakar, and personally managed the privatisation of key state-owned assets.
On May 17, 2007, just before the end of his tenure, Obasanjo sold a 51% stake in the Port Harcourt refinery to Bluestar Oil for $561 million. Similarly, on May 28, 2007, he sold 51% of the Kaduna refinery to the same consortium for $160 million.
Bluestar Oil, comprising Dangote Oil, Zenon Oil, and Transcorp, faced immediate scrutiny, with critics pointing to conflicts of interest. Falana alleged that Obasanjo held significant shares in Transcorp through a “blind trust.”
Backlash and Strike Actions
The transactions sparked criticism from unions such as the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). The unions accused the administration of flouting due process and argued that the sales grossly undervalued the refineries.
“They alleged that the Port Harcourt refinery, sold for $516 million, was worth $5 billion,” Falana stated. The unions’ outrage culminated in a four-day nationwide strike in June 2007, which nearly crippled Nigeria’s economy.
The strike ended only after the federal government assured the unions that the transactions would be reviewed. Following the investigation, President Yar’Adua annulled the sales of both the Port Harcourt and Kaduna refineries.
No Legal Challenges to Reversal
Falana noted that the cancellation of the transactions was not contested in court, as the sales were conducted in violation of the Privatisation and Commercialisation Act.
He praised the proactive role of NUPENG and PENGASSAN in defending national interests and urged them to remain vigilant in light of renewed calls to privatize Nigeria’s refineries.
Call for Transparency in Future Transactions
“The Alliance on Surviving Covid and Beyond (ASCAB) calls on NUPENG and PENGASSAN to intensify their advocacy for transparency and national interest in any future privatisation efforts,” Falana stated.
He also suggested that private entities interested in Nigeria’s refining sector should follow the example of the Dangote Group by building their own refineries instead of seeking to acquire public assets at undervalued prices.
Falana’s remarks underscore the importance of adhering to legal frameworks and ensuring transparency in the management of Nigeria’s public assets to avoid a repeat of past controversies.
