IT is not the first time Nigeria would be toying with the idea of selling some of its national assets.
In the view of analysts, in the past, government properties were sold at giveaway prices to cronies and selected friends at the expense of Nigerians.
They readily cite Nigerian Airways, which used to ply Lagos-New York and other parts of the world, but today, even smaller countries around have national carriers except Nigeria. NITEL is another sour point.
Expectedly, the planned sale of the national assets has remained a hotly debated issue, with Nigerians from all walks of life raising their voices above the din.
Firing the first salvo, Lagos lawyer, Femi Falana (SAN), has urged government and Nigerians to oppose the sale of the country’s assets, particularly in the oil and gas sector of the economy to meet the country’s financial obligations.
In a statement issued in Lagos, Falana said the Nigeria LNG (NLNG) is a lucrative subsidiary of the Nigerian National Petroleum Corporation (NNPC) which has earned the government good revenue over the years.
He said,” If all assets are sold, how would the government fund the budgets of 2017-2019?”
The lawyer quoted the 2016 facts and figures of the NLNG to justify why the gas company should not be sold.
“Total revenue from 1999 to 2015 was $90.3billion, while the figure for the last five years was $48.54billion. Capital investment from 1999 to 2015 was $15.6billion, while the figure for the last five years was $1.3billion,” he stated.
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) is also on the same page with those opposed to the sale of the national assets.
Its Acting Chairman, Shettima Abba Gana, said supporting such calls would be an unwise decision by the federal government. Instead, the commission advised the government to secure loans from IMF and subsequently deploy revenues realised from the assets to offset the loans over a period of 10 or 20 years.
The commission 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.
While buttressing its argument that it will not be strategic to sell income-yielding assets, RMAFC recalled how the National Extractive Industries and Transparency Initiative (NEITI) 2013 audit and financial report on Nigeria’s oil and gas industry had shown that a whopping $12.9 billion was paid to the Nigeria National Petroleum Corporation (NNPC) by NLNG within a period of eight years. But regrettably, NNPC failed to remit the income to the federation account. It added that another audit report showed that NLNG remitted a dividend of $1.289 billion in 2013 which, it said, implied that the asset was highly productive.
RMAFC therefore submitted that Nigeria should not sell valuable assets such as “NLNG and other strategic national resources to meet a short-term financial obligation.”
In television interview monitored by The Nation, Comrade Joe Ajaero, factional president of the Nigeria Labour Congress (NLC), argued that it is only individuals who have been favoured by the economic class and the politicians who stole money from the public coffers that are in support of assets sale.
According to him, “There were some assets they couldn’t steal directly and now they want to use the money they stole either by proxy or directly to buy those assets. That’s what they are planning to do. Talking about selling national assets, the question to ask is: are the people qualified, do they have money to buy it?”
He would rather the federal government provide a better alternative by engaging labour in a debate to find solution to the economic crisis bedevilling the nation as Nigerian workers will be at the receiving end if the sales are allowed to go unchallenged.”People are so wicked and wouldn’t want you to have opportunity of alternatives because life itself has alternative which is for one to die. But they’re trying to put us in a position that there would be no alternative at all. That is not acceptable. As to what we’re going to do, we’re going to do what we know best how to do because it’s not just the workers that would be affected alone. Part of the pressure on this government is because so many people are out of jobs. If many Nigerians are working and they’re earning salaries this government would not be under this level of pressure.”
Labour, he insisted, will ensure the welfare of the workers is protected at all times.
In her official Twitter handle (@obyezeks), a former vice president of the World Bank, Africa Division, Obiageli Ezekwesili, argued that the raging debate over sale of the national assets at this point in time smacks of insensitivity on the part of the federal government.
“I am opposed to the sale of any productive assets like the NLNG because there seems to be no clear economic vision and rigorous analytics to serve as the anchor for such a major policy thrust. We need well deliberated policies from our government including the plans for revitalisation of the programme of privatisation being run by BPE to properly situate public debate of economic structural change agenda. After all, even in our country, there is now proof that the economy can relatively respond to deliberate, well thought and rigorous analysis of context and sound policy options in resolving growth and development problems.
“The evidence that backs this is that it was a modest range of such sound economic policies that helped deliver an average of 5-6 percent growth of our economy on a sustained basis over a long period of nearly a decade and half. It was only recently at the end of 2015 that growth dropped to below 3 percent.”
The parlous state of the Nigerian economy on 29th May, 2015, she observed, “Should therefore have instructed an incisive and urgent macroeconomic stabilisation programme to realign price levels in the economy. If a menu of sound monetary and fiscal policies that the economy needed on May 29, 2015 had been provided, it would have sent the right signal to players that there was no cause for alarm. Had the government made quick and necessary adjustments that corresponded close enough to the level of impact that a 40 percent sharp drop in government oil revenue necessitated, the story would most likely be less negative today.”
Echoing similar sentiments, Comrade Chinedu Bosah, National Secretary, Socialist Party of Nigeria (SPN), in a statement made available to The Nation at the weekend, expressed his misgivings over the proposed assets sale.
In the statement, which reads in part, the SPN scribe said: “The decision to sell off national assets is aimed at both getting some little income and also providing individual capitalists with new profit opportunities. But this is no solution to the crisis and the entire labour movement must see this decision to sell off national assets and other anti-poor policies by the government as a challenge that must be confronted with all the vigour that it entails.”
The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), the party scribe noted, “Must act upon their words opposing the sell-off and seriously mobilise the Nigeria working masses and poor on a sustained mass movement to stop further privatisation and to demand the renationalisation of the commanding heights of the economy under public democratic control and management.”
Raising some posers, Bosah asked: “If the private sector has $15 billion to buy public assets, what is stopping the same private individuals from investing in the economy directly by setting up companies and creating jobs? Is it not curious that the sale would be taking place when private companies are collapsing in droves as a result of the economic crisis?
“If privatisation is the way out, then the private companies should be bailing out the economy at this moment?”
Speaking with The Nation, Basil Odilim Enwegbara, a development economist based in Abuja, said the whole argument about sale of the national assets was an orchestrated call by some selfish individuals.
The so-called nonperforming assets being suggested for sale, he argued, have been “purposefully made moribund so that they could be easily declared nonperforming so that they could end up being sold as mere scraps to those who sponsored those who worked hard to render them moribund.”
He said he is “against the sale of any of our national assets by the Buhari administration given its sense of patriotism and lack of personal motives in disposing of our inter-generational assets, whether called performing or nonperforming. If the sale of national assets can really bring the country out of its present economic recession, it can only be temporarily. As soon as this cosmetic answer disappears, the structural and policy defects inherent in the economy will reappear to take back to another recession, deeper economic recession.”
He wondered where in conventional economics is it demonstrated that once a nation finds itself in an economic recession, all it has to do is just go on selling off its assets? “Surely, selling any of our national assets during this challenging time is both leadership laxity and policy myopia. This is because had Nigeria not some assets, what would the government do? Sell its citizens?”
He further argued that without fully interrogating what brought us to where we are today, any solution without a full diagnosis of the problem is like shooting without aiming at the target. “Believing in mere luck is a dangerous endeavour. That is why selling off any of our national assets should be the last thing that comes to the minds of those running this government,” he said.
Rather than selling off national assets, Odilim Enwegbara noted that “we should exhaust the option of borrowing; and cheaply, foreign loans. With Nigeria’s 14% debt to GDP ratio, we have one of – if not the lowest – national debts among peer economies. The problems with our past borrowings are mostly two borrowing locally at cutthroat interest rates and short-term window and borrowing unproductively for big recurrent rather than for capital projects that are supposed to besides reducing the cost of doing business should have increased productivity and inclusive growth.”
It is because of this that most Nigerians, he said, are averse to further borrowing, “doing so without taking into consideration that a country as creditworthy as ours should be the last to be allergic to borrowing. Borrowing externally also is good for economies like ours because unlike domestic borrowing which crowds out the real sector firms from the debt market, external borrowing allows the real sector to have more money to borrow domestically,” he argued.
But for such loans to yield the badly expected results, they should be based on targeted capital projects, capital projects that are supposed to drastically reduce the current high cost of doing business, which should make locally made goods increasingly as competitive as the imported goods; that is, from among the worst competitive economies to becoming increasingly among highly competitive economies.
Besides borrowing, Odilim Enwegbara believes that “the bilateral currency swap rumoured that government was in the process of negotiating with Chinese government during President Buhari’s recent state visit to Beijing? This question is important because had it been we were able to sign a bilateral currency swap agreement with China that would have reduced the current pressure on our forex reserves, which is in its lowest levels in years.”
That would mean reducing the pressure on forex by about 35%, if not more, given how the presence of about $15bn worth of Chinese yuan would encourage most Nigerian imports to give more preference to Chinese goods.
“Without the current forex pressure that led to the collapse of the naira, it would have made sense for government to have gone ahead and adopt quantitative easing to meet its growing domestic financial obligations,” he stated.
Besides external borrowing, this government, he said, “Should be bold enough to seek a law that will allow it to begin the sequestration of all the oil blocks that previous governments handed to some local and foreign cronies, fronting for these past leaders. We should not only end there. President Buhari should go as far as hiring some of the world’s best auditors to come after the assets acquired as a result of the oil blocks. Besides this leading to recovering over $50bn in cash, government should expect not less than N300bn assets it can easily confiscate.”
Also, the recent discovery by the government that virtually all the international oil companies operating in the country have been engaging in oil theft to the extent that the federal government recently sued two of the IOCs for $12bn in the shortfall/undeclared/under-declared crude oil taken out of Nigeria in recent years.
He wondered why the same international auditors who helped government discover how two US IOCs under-declared the amount of oil they took out of Nigeria to the extent that the amount of oil they sold to their US clients was far higher than what they declared in Nigeria shouldn’t be engaged by the government to fast-track these cases already instituted in some federal high courts in the country?
The Manufacturers Association of Nigeria (MAN) was categorical in its position on the issue. “MAN wholly supports the call for the sale of national assets by the federal government,” the association stated.
The president of MAN, Dr. Frank Jacobs, also told our correspondent: “Dangote spoke our mind. We are not saying government should sell its shares completely in the NLNG, which is worth $15bn. They can sell part of it and still maintain some level of ownership.
“By so doing, we will generate money to beef up our foreign reserves and engender confidence in the investing community, both domestic and international.”
As reactions continue to trail the proposed sale of national assets, the federal government has been urged to exercise restraint.
In his call, Director, Supreme Board, AMORC, Dr Kenneth Idiodi, said should the federal government forge ahead in the move, terms and conditions should apply while economy, security and emotion aspects should be diligently considered.
Idiodi spoke in Lagos recently during an annual public symposium tagged: ‘The Emerging New World Civilisation: What Role for Nigeria?’
The AMORC boss who noted that most privatised assets have failed, however, advised the federal government against wholesale privatisation of state assets
He also suggested that certain assets in the oil and gas sector could be sold instead of allowing them to rot away.
In a similar comment while hinging an argument on vexed issue of enormous gas flaring in Nigeria, he expressed that, with deliberate focus, Nigeria could get more gas than oil and thereby engage more private bodies in the sector.
According to him, “No matter how buoyant the economy may be, it can collapse and it can rejuvenate, what should have been done is preparing for doom in the era of boom, by saving for certain seasons.”
Waxing philosophical, he said: “It is not God or Satan worrying Nigeria, but ourselves, Nigeria is rich in natural and human resources, our challenge is seriousness; when Nigerians determine to be serious, we excel.”
Like Idiodi, Mr. Nnadi Williams, a former staff of NAPIMS, a subsidiary of the NNPC, said it will be better to sell off the refineries as scrap because it would be cost effective.
Speaking in an interview with The Nation, Williams, an engineer, who said he worked at Warri Refinery at inception, recalled that the refinery had never worked optimally from the outset for reasons bordering on inconsistency of government policies in the sector over the years.
“I’m completely for the sale of the refineries because it would amount to sheer waste of investment if we consider spending more money on them. The refineries have since become outdated. Selling
