Home Latest News Mixed reactions trail sales of National Asset

Mixed reactions trail sales of National Asset

….Sale assets and re-invest to critical infrastructure-  Chukwu

UGO AMADI

Mixed reactions has continues to trail the recent  call for the sale of Nigeria’s national assets to raise money to plug the hole in the declining revenue of the country , while some are of the opinion that government can sale and re invest into infrastructure while others are saying no to the idea.

It would be recalled that the Senate President made the call in his welcome address to the Senators recently, at the Senate Chambers, Abuja.

Earlier, Mr. Aliko Dangote had made similar call before the Senate President.

Prominent economic expert and the Managing Director of Cowry Asset Management Limited, Mr. Johnson Chukwu said that the government can sell and re invest into infrastructure and not to sale and spend, stressing that the nation needs to look at various good options available to her in other to come out from the recent recession.

Speaking with Daily Champion, Mr. Chukwu  expressed optimism that proper sales and transparent re investing the sales proceeds  will help the rejuvenate economic activities.

‘’I think the sales of assets if you put it in proper perspective, I support the sales like the NLNG  and proper concession of some of our  national asset like federal airport on certain conditions. I condemned the practice of just sale and spends, it is not just to sale but there must be a clear clarifications of the asset that have the capacity of rejuvenating the economic activities.” He noted

For instance the Nation made about $1.5 billion dollars in  NLNG dividend in 2015 and corporate income tax of about USD2.2 billion the same year, if you want to value the share and you use the earnings method, it will give you an investment portfolio of about USD20billion dollars. If the we are going to sell our stake in the NLNG , we need to re-invest that money into the critical infrastructure that has the capacity to expand economic activities.

However, if the sales is just to inject liquidity into government coffers for onward distribution to the three ties of government, the sales will not be beneficial to the Nigeria’s economy so, i will not go for the outright sales of the national assets for spending.

But if the sales are for re-investment, it will make a lot of economic sense; let’s say the USD20billion dollar proceeds from sale of a National asset like NLNG is exclusively invested to build railways like the Lagos -Abuja  and Lagos- Calaber gauge rail which is about $8.3 billion ,which is a project that has the capacity to create economic activities that will affect the agricultural, manufacturing sector etc. which also will in turn generate enough income and tax revenue to the economy. This will invariably compensate for the forgone dividend that we would have earned in the NLNG.

Speaking on the poor handling of former National assets and lack of transparency, Chukwu explained that as a progressive nation that desires to come out of the woods of the recent recession,’ we don’t need to dwell in the mistakes of the past or allow the fears of the past to stop us of the needful things to do, all we need according to him is for the government to ensure strict global transparent standard that can deliver for the country.

Invariable, proper re-investing of any sales  proceeds from assets will achieve two things, one is the infrastructure that will resuscitate economic activities, create employment and income that will help us come out of the current crisis.

But for Eminent economist and Managing Director Financial Derivative Mr. Rewane Bismarck said that the Nigerian Liquefied Natural Gas NLNG is a cash cow that should not be sold.  he said “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”.

But Manufacturers Association of Nigeria, who reacted ,was categorical in its position of the issue saying MAN “wholly supports the call for sales of national assets by the Federal government”.

 MAN’s President, Dr. Frank Udemba Jacobs said “Dangote spoke our minds. We are not saying government should sell its share completely in NLNG. NLNG is worth $15 billion so they can sell part of it and still maintain some level of ownership.

“That is what we are saying and by so doing we generate money to beef up our foreign reserve and engender confidence of the investing community both domestic and international in the economy.” He continued  “Aliko Dangote spoke our minds.

However, an astute consultant and the Managing Director of Scribe and Sage,  Adelowo Adesina  has a different view that , it will not be profitable for the country to sale it viable national asset like NLNG.

Speaking to Daily Champion, he said that the present viable world economic outlook is more of gas economy than oil. What the country should do is to run the venture in a more commercial viable way.

He noted that the previous national asset sold has not yielded any good dividend for the economy; also there is no guarantee that if NLNG is sold today it will help in reviving the economy.  He expressed worry over the ambitious call from the senate to sell the asset, stressing that they (the senate) don’t have the moral disposition to make such calls, when they have not told Nigerians how much they are earning.

According to him, there are a lot of questions that are yearning for answers, what is the basis for the sales, who will value the assets and how objective and transparent are they going to be, who are the buyers. What are the empirical facts on the real state of the economy?

He also revealed that some multinational may be the ones sponsoring the clamour for the sales of the national asset, so that they can recover their debt from the government. It will be recalled that the federal government owes about $6billion debt in her joint venture cash call.

Adesina canvased that for the country to be on the road for economic recovery, the nation should balance her fiscal and monetary policies; also, the recovered loot and generated revenue should be channeled to the production sector of the economy. He stressed that sectorial stakeholder of sound mind should be gathered together to have a holistic view of the economy and research should be conducted to have an empirical state of the economy instead of working with mere speculations.

Also, contributing to the discus, the Civil Liberties Organisation (CLO in a statement by its executive director Ibuchukwu  Ohabuenyi  Ezike urges the NASS to pass a Resolution directing President Buhari not to sell any public utilities built with tax payers’ money.

 

The call for the sale of public utilities is absolutely uncalled for and worrisome. We warn the politicians not to take the patience of agonizing, wailing and impoverished Nigerians for granted”.

 

The CLO also urged the law makers and, indeed, the federal government to look elsewhere for the solutions to the economic crisis facing Nigeria.

The Organisation rather in its suggestion called for a huge cut in the cost of running government, including reduction of aides, wages/salaries and allowance packages for both politicians and workers in the executive and legislative arms of government and across all the tiers of government.

It also proposed the implementation of the recommendations of the Nigerian Labour Movement on the boosting of the National economy and also begin immediate debate and implementation of the Report of the 2014 National Conference that points the positive way forward for Nigeria in all sectors and directions.

” Running Nigeria like a cult in lopsided fashion does not stimulate patriotism and encourage citizens to give their best. It takes after a process where “monkey de work and barboon de chop.”

Doing this will make the states financially buoyant as they would exploit resources that abound in their territories and powers and resources to the federating units devolved. This will make our states financially stable and stop a process of states running to Abuja caps in hands begging for bailouts and all that” Ezike said.

The CLO also asked government to invoke and strengthen the oversight function mechanisms and adequately monitor true and honest execution of the 2016 budget to ensure absolute compliance with the Appropriation Law.

It is the opinion of the Organisation that government should open the borders to allow the importation of essential foods for domestic uses pending when Nigeria has been able to produce enough food to feed our people.

It backed the position of Deputy Senate President, Ike Ekweremadu and other Senators who opposed the call by the Senate President on the floor of the Senate .

“We condemn, in its entirety, Dangote and Emir of Kano, Ahaji Sanusi Lamido’s, support for the sale of our hard earned property to themselves and allies and warn that CLO and other civil society organisations in alliance with the labour movements will mobilise Nigerians against any such attempt to sell our national utilities to selves and fronts” Ezike said.

Also ,The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) came out openly to disagree with Aliko Dangote on the sale of Nigerian Liquefied Natural Gas (NLNG) and other Federation Assets he proposed for sale.

 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”, they said.

 “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 carbon dioxide (CO2) impurity levels.

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