Eric Elezuo and Olatunde Jogunomi
As the present economic crunch bites harder, the Federal Government had proposed to sell off national assets.
The news of the proposed sale of the National Assets has generated serious rancour among the Nigerian populace. Consequently, diverse views have been expressed with many saying no to the idea while some on the other hand, such as the private sector operators, have thrown their weights behind the sale.
These set of people believe that the sale of the assets will present a quicker relief measure, and come in handy to fund the 2016 budget as well as boost the country’s foreign exchange.
An official of one of the new generation banks, who does not want her name in print said that the issue of sale of national assets should be looked at holistically, stressing that those calling for the sale should ask themselves, if the money realized would help solve the problem at hand, and how much the nation will realise from the sales, and of course what hole the fund from the sale is meant to plug. She added that there are a lot of economic problems facing Nigeria, which if not solved holistically, would make things worse after the sale proceeds must have been used up, advising that Nigeria should find another means of solving the economic problem and should forget the idea of selling the national assets.
“The issue of selling the country’s national assets is not what should be horridly done, but considered holistically towards realizing if the money from the sales would solve the economic problems and the basic holes which the proceeds will plug. Otherwise, we should find another means of solving our recession issues because if after the sales and nothing tangible is achieved, the country will be worse off,” she said.
Among notable entities that called for the sale of the assets which include the Nigeria National Petroleum Corporation (NNPC), the national monuments, Nigeria Liquefied Natural Gas (NLNG) among others is African richest man, Alhaji Aliko Dangote.
In an interview with CNBC Africa, the billionaire had said the government would be able to raise between $12 billion and $15 billion from the sale of the company.
“If I had challenges in my company, I would not hesitate to sell assets, to remain afloat, to get to the better times, because it doesn’t make any sense for me to keep any assets and then suffocate the whole organisation,” he had said.
“The African Finance Corporation… it can fetch them $800 million easily. My own suggestion before was that they should even sell 100 percent of NLNG. I don’t think government should be in any business of investing in sectors of LNG.
“A company like that, with earnings of $1.5 billion on the average should get anywhere between $12 billion and $15 billion.”
According to him, it does not make any sense to keep assets and then suffocate them, advising against an International Monetary Fund (IMF) loan and called for revenue mobilisation through other means. He said: “The only way for us to get out of this recession is to make sure we move into action quickly by diversifying the economy quickly. I think the real challenge is now for us to have the political will in terms of selling some assets. I think it is an easier route than going to IMF or World Bank to borrow because what we need to do is to beef up reserves”.
But as the billionaire came under attack for his comment because people believed he was bent on buying up the assets, he defended in an interview that “his advocacy for the sale of some National Assets is not for selfish aim but to help boost the economy as well as to stabilise the naira exchange rate. He said even if the FG offered him National assets on credit, he is not interested in acquiring them”.
In his own view, eminent Economist and Managing Director, Financial Derivative, Mr. Rewane Bismarck, said that the NLNG is a cash cow that should not be sold.
“I believe in the sale of national assets in a strategic manner. That is you sell and go into a simultaneous repurchase agreement so when the prices go up you can buy it back and pay a carrying cost. But I am against selling the NLNG because it is a cash cow. You sell a non strategic asset at this time but even if you sell the strategic assets which are the Joint Ventures, you cannot even lock down. So we must have a simultaneous option to repurchase when the prices improve,” he said.
The Central Bank of Nigeria has also lent its voice in support of selling the assets, saying that the government could raise $40 billion from the sales. Speaking to the News Paper Proprietors Association of Nigeria, the CBN Governor, Godwin Emefiele said: “Also in the short run, we can sell assets. You will recall that as at April 2015, I had an interview with Financial Times of London during which even before the government came on board, I had opined that there was need for the government to scale down or sell off some of its investments in oil and gas, particularly in the NNPC and NLNG as at that time when the price of oil was around $50-$55 per barrel.
“We actually commissioned some consultants that conducted the study, and at the end of that study we were told if we sell 10% to 15% of our holding in the oil and gas sector that we could realise up to $40bn.”
But the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) openly disagreed with those calling for the sale of Nigerian Assets.
In a statement signed by the Commission’s Acting Chairman, Shettima Umar Abba Gana, RMAFC argued that “it would be unrealistic for the Federal Government to dispose of its crown jewels that generate revenue and expect to keep the Federation Account healthy over the long term.
“It is the considered view of the Commission that Nigeria’s Assets like NLNG and other strategic national resources should not be sold to meet short-term financial obligation.”
RMAFC advised that instead of selling off such vital assets which generate funds for the Federation, wealthy Nigerians should be encouraged to set up their own LNG projects, since Nigeria ranks seventh in the world and first in Africa with natural gas reserves base totaling 188 trillion cubic feet (Tcf) as at May 1, 2015. In addition, Nigeria’s natural gas is regarded as one of the best in the world as it has low hydrogen sulphide (H2S) or carbondioxide (CO2) impurity levels.
But even as the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC), civil society groups in conjunction with the Arewa Consultative Forum (ACF) have threatened a show down with the Federal Government if the assets should be sold, the government has put for sale two of the 11 jets in the presidential fleet, a Falcon 7x and a Hawker 4000, hoping to raise about N7 billion.
The groups separately said that rather than sell the assets, ‘’allowances of public officers and government overhead cost should be reduced to cushion the harsh effect of recession.’’
The ACF and the National Union of Garment, Textiles and Tailoring Workers of Nigeria, said in separate statements that Nigeria was not for sale.
They said that selling national assets, such as airports, Nigeria Liquefied Natural Gas (NLNG) and refineries was like selling Nigeria.
The ACF National Publicity Secretary, Alhaji Muhammad Ibrahim, said that the previous sale of national assets had not helped the country economically.
Ibrahim said that selling NLNG and four refineries would only strip the country of vital assets without requisite funds going into the public treasury, listing some public enterprises sold in the past, including Nigeria Airways, Nigerian National Shipping Line, Ajaokuta Steel Company, NITEL and Power Holding Company of Nigeria.
‘’The ones that survived, their service delivery cannot be said to be better.
Labour on the other hand has said that should the government go ahead to sell the assets, the mother of all strikes will befall the country as they would call out all its members from their duty post.
“If they go ahead to sell the assets, we will protest. We have done that in the past. When it comes to selling off our national assets, if you remember, there was a time when they tried to sell the refineries when Obasanjo left office. We protested against it and that was how that decision was reversed. It is not as if these assets cannot add value, but because they have not been allowed to operate maximally,” said Joseph Wabba, NLC president.
Howbeit, if precedence is anything to go by, the possibility of the Federal Government reneging from their proposed intention to sell may be a tall order just as would-be buyers are on standby bazaar gong to sound. The assets are presently on going, going … status.