MAN, Muda Yusuf, Labour, Others Clash Over Sale Of Refineries

A growing debate is unfolding across Nigeria over the future of its ailing state-owned refineries, as stakeholders voice sharply contrasting views on the government’s proposed divestment plan. With billions of dollars already sunk into reviving the facilities in Port Harcourt, Warri, and Kaduna, yet minimal output to show, calls for full or partial privatisation are intensifying.
The federal government has long struggled to bring the refineries to optimal performance, despite repeated turnaround maintenance efforts. According to recent reports, over $3 billion has been spent on rehabilitation in the past few years alone, with historical expenditure since 2013 exceeding $27 billion. Despite this, the refineries remain grossly underutilised, prompting many to question whether continued public ownership is economically viable.
The Manufacturers Association of Nigeria (MAN) is among the most vocal advocates for divestment. MAN’s director-general, Segun Ajayi‑Kadiri, criticised the ongoing federal funding of the refineries, stating: “These refineries gulp government resources with no result. When something belongs to everybody, it belongs to nobody.”
Acquiescing to that view, partner, and chief economist at SPM Professionals, Dr. Paul Alaje, noted that government ownership over the years has not worked, stressing that the refineries are in a very worrying state, despite the fact that billions of dollars have been expended to revive them. He said the goal of government is welfare, but when business is in the hands of private ownership it becomes highly competitive.
“The goal of government is welfare. The business of refinery is highly competitive. Now that subsidies have been removed, it does not make any economic sense for the government to still hold sway to those refineries. What should we do? Two things are possible; first is the outright sales of the refineries through open bidding process, not selling to cronies and friends. I mean getting the actual value of these refineries.Secondly, if the government should do public/private partnership, retaining a minority share in the refinery will be for national pride. We have demonstrated this in the NLNG arrangement when the government retained minority share and allowed the private sector to hold the majority share. If it must still be for Nigeria then minority shares is something we must look at
“But I must put a caveat. If we must sell at all, we cannot adopt the method of sale of the PHCN to the DisCos that are unable to perform. The three things the government must put forward include the ability to buy and pay, the ability to kick start operations and revive the moribund refineries, and showing source of funds for both acquisition and operations. If these three are missing, we will just have the refineries transferred from one person to the other or one organisation or private sector institution will just come and say they want to retrench all staff, which will become pressure on the government. So, it is important we don’t just sell it to people without experience,” said Alaje.
The chief executive of the Center for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the refineries should be sold outright, but cautioned that what is important is that the process must be transparent. He said the refineries have been a huge liability not only to the government, but also to the country at large considering how much have been spent on maintaining them to no end.
Yusuf said the government had committed Nigeria’s forward sales of crude to the turnaround maintenance of the refineries still to naught. “That is part of the reasons they are not able to remit any substantial amount to the federation account since the crude have been sold upfront. Moreover, it has been a major source of leakage. So, if something is a liability, the earlier you do away with it the better. I think the government should give the things out, even if it’s for free, provided whoever is taking them will revive them at his own cost; my only concern is that it must be done in a transparent manner so that we don’t have a repeat of what happened with the DisCos.”
Backing this stance, financial economist at Auchi Polytechnic, Zakari Mohammed, pointed to the failures of repeated rehabilitation contracts. “After spending nearly $2.5 billion, these facilities break down within months. It’s a systemic failure. We need a transparent privatisation process like the Dangote model,” he said.
That model, the privately funded $20 billion Dangote Refinery, built with a capacity of 650,000 barrels per day, has become a benchmark for proponents of privatisation. They argued that allowing credible private sector players to take over refinery management would improve efficiency, reduce Nigeria’s reliance on fuel imports, and boost foreign exchange reserves.
Economist at Cashlinks, Charles Okhenovo, has added his voice to the calls for reform. “We’ve tried running them ourselves. It hasn’t worked. Let competent private firms handle them,” he said, warning that political interference has repeatedly hampered progress.
However, the push to privatise has not gone unchallenged. Critics, including financial economist at Nnamdi Azikiwe University, Dr. Felix Echekoba, cautioned against a repeat of past failures. “We’ve seen how previous privatisations like NEPA and NITEL ended in disappointment. We don’t yet have the regulatory strength to manage private players properly,” Echekoba argued, instead suggesting a public-private partnership model as a safer alternative.
Labour unions are also wary, fearing widespread job losses if the refineries are sold outright. Public refineries have long served as major employers in their host communities. Without adequate labour protections, union leaders warned, a sale could bring more harm than good.
Some voices have taken a middle-ground position. Former vice president Atiku Abubakar, has advocated selling stakes to private operators before further rehabilitation, suggesting it would have saved the country from needless borrowing and poor performance. Likewise, economic observers and editorial writers have emphasised the potential of a phased divestment strategy, leveraging existing legal frameworks under the Petroleum Industry Act (PIA) and the Bureau of Public Enterprises (BPE) to ensure accountability and long-term value.
Recent developments seem to underscore the urgency. The Port Harcourt refinery, briefly restarted in early 2025, was shut down again by mid-year for maintenance. Similar setbacks have been reported in Warri and Kaduna, where technical issues and funding shortfalls persist despite billions spent.
As Nigeria confronts currency devaluation, rising fuel costs, and dwindling foreign reserves, the debate over refinery privatisation is shifting from ideology to pragmatism. Advocates see it as an opportunity to finally end decades of inefficiency, while critics urge caution to prevent new monopolies and social disruption.
For now, “The government faces a critical decision; maintain a costly status quo, or embrace a restructured model that combines private capital with strong oversight. Whatever the choice, the outcome will shape Nigeria’s energy security and industrial future for decades to come,” noted development economist at Adeleke University, Professor Tayo Bello.
Adding his voice, financial economist at Ebonyi State University, Philip Nkwo, argued that “selling off the refineries in their current state amounts to transferring public liabilities into private hands without addressing the root inefficiencies. The government is likely to offload them at a loss, after investing billions of dollars in turnaround maintenance. Instead of privatisation, we should focus on professionalising their management and insulating them from political interference.”
Also commenting, economist at Ambrose Ali University, Theophilus Edo, argued that “privatisation in Nigeria often lacks transparency and ends up benefiting a select few with political connections. The refineries are strategic national assets that can still be viable under a proper public-private partnership model. Selling them outright risks deepening fuel insecurity and ceding control of a critical sector to profit-driven interests without regulatory safeguards.”