Analysis of multi-factors affecting the performance of Nigeria's refineries: a systems thinking approach

Abstract

PurposeThe challenges facing the productivity of Nigeria's refineries have generated much academic discourse. This study was carried out to develop a causal loop model showing the interrelationships of the multiple factors driving the poor performance of the refineries. Using a framework of political, economic, social and technical (PEST) factors, the developed model helped identify leverage points for policy intervention in the system.Design/methodology/approachA mixed-method approach was adopted to collect quantitative data from 118 refinery workers and qualitative data from 14 participants polled from the various Nigerian National Petroleum Corporation (NNPC) subsidiaries. The quantitative data were analysed through structural equation modelling (SEM) to prioritise the more significant factors, while the qualitative data were analysed by content analysis to further validate the questionnaire findings and provide clearer contexts for the operationalisation of the factors.FindingsThe structural equation model identified several PEST factors such as government interference, political indecision, funding issues, spare parts costs, pipeline vandalism, oil theft, maintenance issues as some of the significant factors affecting the performance of the refineries. The interviews validated these findings and provided richer contexts on how these factors operate within system. A causal loop model was developed based on these findings to identify key leverage points upon which policy intervention through best practice, management autonomy and stakeholder satisfaction was proposed to address these challenges.Research limitations/implicationsThe study uncovers that the factors which affect the performance of the refineries have significant multiple interrelationships, the understanding of which is crucial for developing effective solutions by policymakers.Practical implicationsThe findings of this study lay important foundations for a deeper understanding of how PEST factors interact to drive suboptimal performance across NNPC refineries.Originality/valueThe causal loop model developed in this study provides a new approach to viewing and analysing the associated factors affecting the performance of Nigeria's refineries from a non-linear perspective.