Despite clarification by Budget and National Planning Minister Udoma Udo Udoma that government will only dispose non-critical assets to take the country out of recession, controversies over the issue rage on. Assistant Editor OKWY IROEGBU-CHIKEZIE reports the divergent views on Federal Government proposal.
SELLING off some national assets as ‘unprofitable’ has been proposed by the Federal Government to cushion the effects of recession on the economy. But the proposal was interpreted differently by Nigerians. Many, who believe moribund assets should be auctioned and their proceeds ploughed into profitable venture endorsed the idea. Others, who fear the sales of national assets may end up in the hands of those who plundered the commonwealth of the people, have kicked against it.
Budget and National Planning Minister Udoma Udo Udoma has been busy explaining that the government means well with its proposal. The idea, according to him, is to quicken the recovery of the economy. But it may take a longer time for the minister’s explanations to end the controversies.
Udoma was in Lagos penultimate week to further clarify that only non-critical assets would be sold.
“The President’s Economic Management Team is working on advance payment of licence renewal, infrastructural concession, use of recovered funds, et cetera to reduce funding gaps and implementation of fiscal stimulus/budget priorities”, he said at a forum.
But the organised labour has rejected the proposal. It warned the government not to yield to the temptation, vowing to resist the move.
The Ayuba Wabba-led Nigerian Labour Congress (NLC) said that an asset such as the Nigeria Liquefied Natural Gas (NLNG), which yields over $1 billion yearly, should be treasured as valuable.
Udoma however clarified that the government has a plan to dispose part of its 49 per cent stake in the NLNG, sell off some aircraft in the presidential fleet and hands off the management of the the four refineries in Warri, Port Harcourt and Kaduna.
The proceeds from the sale, he noted, would be used bridge the funding gap in the budget and boost the nation’s dwindling foreign reserves,.
Frontline industrialist Alhaji Aliko Dangote did not only buy into the proposal plan, he advocated that the sale of the assets would cushion recession’s biting effects.
Dangote’s support pitted him against many Nigerians including Wabba, who argued that embarking on such venture would be fruitless. He recalled how previous sale of national assets failed to add value to Nigerians because the process was not transparent.
Kicking against the proposed divestment of parts of federal government’s stake in the NLNG, he said: “It is on record that dividends in excess of $1 billion have been accruing to the national coffers annually from the gas company over the past 12 years. These calls are more worrisome when one considers the history of sovereign assets divestiture in the past.
“Where are the proceeds from sale of assets in the power sector for instance? With the benefit of hindsight, it is obvious that these assets were distributed to favoured individuals and surrogates of the ruling elite without any appreciable benefits to Nigerians.”
The labour leader has an ally in Dr. Dan Nkwocha, a lecturer at the Department of Sociology, Imo State University, Owerri, who described the proposed sale as “wrongly-headed”.
Nkwocha said that such venture would not favour Nigerians because the government lacks the necessary policy, structure and mechanism to ensure that the assets to be so disposed would be efficiently managed and run for the benefit of all.
According to him, Nigerians have not been encouraged to buy into the proposal because of their experience with the sale of state-owned assets such as Power Holding Company of Nigeria (PHCN), Nigerian Telecommunications Limited (NITEL) and National Fertilizer Company of Nigeria (NAFCON) among others.
“Where are PHCN and NITEL?” The university don asked, accusing investors who bought the assets of “reaping from where they did not sow.”
According to him, the new owners took advantage of the government’s lack of effective policing agents to deny Nigerians the benefits of efficient and cost-effective post-privatisation services.
He said that despite the sale of the defunct PHCN assets, Nigerians are yet to breathe a sigh of relief by way of improved electricity supply. He lamented that rather than enjoy improved electricity supply, “Nigerians have become victims of the rapacious profiteering antics of the new core investors who daily fleece electricity consumers for services not rendered.”
Admitting that the economy may be in dire straits, requiring measures to pull it out of recession, Nkwocha said that rather than sell national assets, government should commence aggressive diversification of the economy by exploiting opportunities in the agriculture and solid mineral sectors, as well as encouraging manufacturing.
The Trade Union Congress of Nigeria (TUC) also condemned the proposal, warning that the Federal Government may be preparing the ground for civil turbulence with its proposal. The Congress, through its President, Mr. Bala Kaigama, and Acting Secretary-General, Mr. Simeso Amachree,classified proponents of the idea as enemies of the nation.
They said: “The TUC warns those calling for the sale of national shareholdings in NLNG and concession of the country’s airports to drop the idea if they do not want to incur the wrath of workers. Those suggestions are disgraceful and portray them as enemies of the state.”
Before Udoma’s clarification, the Senate had unanimously rejected calls for the sale of strategic assets. Some of the senators alleged that it would impoverish majority of Nigerians that are already traumatised by the parlous state of the economy.
Deputy Senate President Ike Ekweremadu specifically said that only non-performing assets should be sold. According to him, selling productive assets will be unfair to the next generation, pointing out that countries such as United Arab Emirates (UAE) and Saudi Arabia guard their assets jealously.
Some of the non-performing assets, which Nigerians wanted sold, are aircraft in the presidential fleet. There have been reports, for instance, that in the past 15 months since President Muhammadu Buhari came into the saddle, government had spent N5 billion on the maintenance of the nine aircraft in the presidential fleet.
Those opposed to the proposed sale argue that selling income-yielding assets will be counter-productive. To them, it makes greater sense to sale the non-performing assets, which require a huge sum of money to maintenance.
They noted that selling five of the aircraft in the presidential fleet and other unproductive assets will generate revenue that could be used in addressing the Nigeria’s economic crisis.
Proponents adamant
President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Chief Edem Bassey, said that “there is nothing wrong in selling national assets that are no longer useful or efficiently operated by Federal Government.” NACCIMA IS one of the umbrella bodies for the organised private sector.
Central Bank of Nigerian (CBN) Governor Godwin Emefiele also threw his weight behind the proposed sale. He said the when the idea was first suggested last year, it was reported that the move had the potential of rasing $40 billion for the country.
However, Emefiele explained that with the prevailing flexibility in the market, such venture could only yield between $10 billion and $20 billion. He said the assets could still be sold, but with a caveat that the Federal Government could buy back such assets when the economy eventually has fully recovered.
Emir of Kano Muhammad Sanusi II and former CBN chief said the option of selling the assets could be explored with the consciousness of preserving notable interests in such assets by making the sale transparent and also positioning it to yield expected value.
Push for options heighten
The Manufacturers Association of Nigeria (MAN) which has not opposed the proposal, urged the government to maintain parts of its ownership stake in the assets should they be sold.
MAN’s President Dr. Frank Udemba Jacobs said: “Dangote spoke our mind. We are not saying government should sell its shares completely in the NLNG, which is worth $15 billion. They can sell part of it and still maintain some level of ownership.”
Jacobs noted that by maintaining some level of ownership, “Nigeria will generate money to beef up her foreign reserves and engender confidence in the investing community, both domestic and international.”
Also speaking, the Acting Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Shettima Abba Gana, said selling the assets will be an unwise decision.
Instead, he urged the government to secure loans from the International Monetary Fund (IMF) and subsequently deploy revenues realised from the assets to offset the loans over a period of 10 or 20 years.
The RMAFC chief reasoned that after the loans would have been offset within a decade or two, the nation would still continue to enjoy the income from such assets.
He cautioned against disposing valuable assets such as NLNG and other strategic national resources to meet short-term financial obligations.
In the same vein, the President, National Union of Petroleum and Natural Gas (NUPENG), Igwe Achese, urged the Federal Government to attract investors by building refineries and set the tone for economic recovery through short, medium, and long-term economic measures to cushion the effect of recession.
The question begging for answer is: Will the government jettison the proposal and embrace other options? Although the government has neither listed the assets to be auctioned, nor set modalities for their sale, it is clear that the government would find it tough ramming the pill through the throats of many Nigerians.
