The raging debate over the desirability or otherwise for Nigeria to sell some of its assets to raise funds to help the country out of recession is yet to abate, as some stakeholders and some elites locked horns with economic experts yesterday.
While the stakeholders, including the Manufacturers Association of Nigeria (MAN) and Nigerian Association of Chambers of Commerce Industry Mine and Agriculture (NACCIMA) endorsed the move, the experts considered it as a threat to the economic independence of the country.
The National Economic Council (NEC) being the highest economic decision body chaired by Vice President Yemi Osinbajo had on Thursday said it was considering the sale of some national assets to revive the country’s ailing economy. Other members of the Economic Council are governors and key ministers in charge of the economy and the Central Bank of Nigeria (CBN) governor.
NEC’s position on the issue came after Aliko Dangote, Africa’s richest man, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), and the Senate President, Bukola Saraki, had suggested the sale of some national assets, saying this will provide the cash to reflate the economy, reopen factories and put money in people’s pockets.
Dangote had specifically called on the federal government to sell its stake in the Nigeria Liquified Natural Gas Limited (NLNG) to beef up foreign reserves.
Speaking with LEADERSHIP weekend yesterday, President of MAN, Mr. Frank Jacob said the Association was in support of the plan by the federal government to sell some of its assets to investors, even as he hinted that it is part of a proposal sent to the government by the association.
In a telephone interview with our correspondent, Jacob who maintained that selling some of the nation’s assets will increase foreign reserve and bring in more foreign exchange explained that it will also increase investments in the country by doing that it will create job opportunities.
“If the policy is properly implemented, more investor will bring their dollars to invest and solve the problems of exchange. Also, it must be public private partnership driven”, he said.
Similarly, the Nigerian Association of Chambers of Commerce Industry Mine and Agriculture (NACCIMA), also stated vehemently that there was nothing wrong in selling some national assets that are no longer useful or efficiently operated by the federal government.
Some experts, stakeholders and some lawmakers, however, kicked against the sale of the country’s assets. Deputy Leader of the Senate, Bala Na’Allah and Senator Andy Ubah decried the call for sale of national assets.
According to them, if the country sells its asset now to recover from this recession, what would the country sell in the future if it slipped into another recession? “We must seek an alternative way of recovering from this recession but sale of our asset is not the way out,” Senator Ubah said.
Also, speaking with our correspondent yesterday, Tayo Bello, PhD, a senior lecturer at the department of Private and Commercial Law, School of Law and Security Studies, Babcock University, Ilisan Remo, Ogun state, said the federal government should rather use monetary development instruments instead of assets sales.
He described monetary development as a source for great economic recovery through transmission mechanism. According to him, it is generally assumed that an increase in the money supply stimulates the economy through decline in interest rate.
He said, “An increase in money stocks lower nominal rate. The decline in nominal rates implies decline in real rate. A fall in real interest rate stimulates purchases of equipment, and durable consumer goods by lowering the cost of borrowing and reducing the opportunity cost of spending.”
He further noted that to this effect, monetary development is very crucial for economic recovery and development. This worked for the United States of America during the great depression, he added.
On how best Nigeria can come out of the current recession, he said, “Any attempt to use fiscal policy now will be counterproductive. The situation at hand requires drastic measures and policies to reduce inflation and unemployment in order to encourage growth. Selling off of government investment like NLNG and use the proceeds to bail out economy out of recession as recommended by a business icon should be discarded.”
Bello noted that the decision to dispose Nigeria’s assets due to recession will not be in the interest of the generality of the people. He stated that stimulating the economy at urban centers a lone without concrete efforts to get to the locality will tantamount to total failure.
Towing the same line of argument, a Senior Lecturer at the department of Energy/Oil & Gas Law, University of Abuja, Dr Olanrewaju Aladeitan condemned the suggestion that the nation’s assets should be sold now and the proceeds used to re-jig the economy.
He said, “It doesn’t make sense to sell then, get the funds and use it to re-jig the economy because if we hold on to it we will continue to generate funds from it. So personally I don’t think that is the way to go for now”.
“The fact that the country is selling our gas in the international market and generating substantive income from it regularly, there is no reason to sell the company”.
Aladeitan is optimistic that with peace in the industry, Nigeria can still forge ahead and come out of the economic recession without selling assets, just as he said, taking a look at what is happening in the international market, the estimation of Shale oil & gas has been proven to be incorrect.
“Unlike what we thought as at last year that the proven reserve of the US was still large some of those estimate has been exaggerated,” he said, adding that with the current stabilization of oil prices at about $40 – $50, what the country need is to meet its production portion of about 2.5 million barrel per day to beef up the country’s reserves in the short run.
According to him, the economy diversification programme of the present government should be restructured to focus more on the long term benefits. The focus on agriculture and mineral resources can only make the country an exporter of commodities or raw materials.
Dr. Aladeitan explained that serious investment into the agriculture sector as well as the knowledge and service sector will bring the country out recession in the short run. Focusing on manufacturing and infrastructure development will stabilise the economy on the long-run, he said.
How We Got Into This Mess- PMB
…Says treasury looters behind Niger Delta Militants –
President Muhammadu Buhari yesterday explained how and why Nigeria got into the trouble waters called recession, with an assurance that with all hands on deck, including the best brains in the Diaspora, the country would bounce back in the shortest possible time.
He also accused looters of the country’s treasury of being behind the resurgence of militancy in the Niger Delta region, saying they use the stolen monies to sponsor the militants.
The president spoke in the United States of America when he met with top rate Nigerian professionals based in the United States of America described by Mrs. Abike Dabiri-Erewa, Senior Special Assistant to the President on Diaspora Matters and International Relations, as ‘15 of the best people God ever created’.
The professionals who were in New York to meet with the Nigerian President included top flight aeronautics engineers, physicians, I.T experts, a Judge, a top policewoman, entrepreneurs, an Import Specialist at Customs and Border Protection, professors, two straight A students and many others.
“Those who stole Nigeria dry are not happy. They recruited the militants against us in the Niger Delta, and began to sabotage oil infrastructure. We lose millions of barrels per day, at a time when every dollar we can earn, counts. It is a disgrace that a minimum of 27 states, out of 36 that we have in Nigeria, can’t pay salaries”, a statement by his special adviser on media and publicity, Mr. Femi Adesina quoted President Buhari as saying.
The parley provided Buhari the opportunity to explain how and why Nigeria got into trouble.
He said, “We got into trouble as a country, because we did not save for the rainy day. For example, between 1999 and 2015, when we produced an average of 2.1 million barrels of oil per day, and oil prices stood at an average of $100 per barrel, we did not save, neither did we develop infrastructure. Suddenly, when we came in 2015, oil prices fell to about 30 dollars per barrel.
“I asked; where are the savings? There were none. Where are the railways? The roads? Power? None. I further asked; what did we do with billions of dollars that we made over the years? They said we bought food. Food with billions of dollars? I did not believe, and still do not believe.
“In most parts of Nigeria, we eat what we grow. People in the South eat tubers, those in the North eat grains, which they plant, and those constitute over 60 per cent of what we eat. So, where did the billions of dollars go? We did a lot of damage to ourselves by not developing infrastructure when we had the money.
“Talking of our military, they earned respect serving in places like Burma, Zaire, Sudan, Liberia, Sierra-Leone, and then, suddenly, that same military could no longer secure 14 out of 774 local governments in the country. Insurgents had seized them, calling them some sort of caliphate, and planting their flags there; till we came, and scattered them.
“Boko Haram ran riot, killing innocent people in churches, mosques, markets, schools, motor parks, and so on. And they would then shout Allahu Akbar. But if they truly knew Allah, they would not do such evil. Neither Islam, nor any other religion I know of, advocates hurting the innocent. But they shed innocent blood, killed people in their thousands. Now, we have dealt with that insurgency, and subverted their recruitment base.
“But I prayed so hard for God to make me President. I ran in 2003, 2007, 2011, and in 2015, He did. And see what I met on ground. But I can’t complain, since I prayed for the job. In the military, I rose from 2nd Lieutenant to Major-General. I was military governor in 1975 over a state that is now six states. I was head of state, got detained for three years, and headed the Petroleum Trust Fund (PTF), which had N53 billion of that time in Nigerian banks.
“God has been very good to me, so I can’t complain. If I feel hurt by anybody, I ask God to help me forgive. He has done so much for me. After 16 years of a different party in government, no party will come and have things easy. It’s human. We need quality hands to run Nigeria, and we will utilize them. I will like to welcome you home when it’s time. But I’ll like you to be ready.”
Expressing his delight in the meeting, the president said, “Wherever you go in the world, you find highly competent and outstanding Nigerians. They not only make great impact on their host countries and communities, their financial remittances back home also help our economy, particularly at a time like this, when things are down”.
On their part, the Nigerian professionals pledged to contribute their quota towards re-launching their fatherland to a new dawn.