Recession: Should President Buhari Sell Some of Nigeria’s Assets?

President Muhammadu Buhari

There have been calls in recent times for the Federal Government to sell some of its assets, especially in the Oil and Gas sector, to raise foreign exchange so that the economy can get out of the recession.

Speaking to CNBC Africa last week, Africa’s Richest man, Aliko Dangote said that, following the economic challenges the country is facing, the Federal Government should sell some assets.

“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.

What we need to do now in my own thinking… we have a lot of assets to sell. We can sell part of the joint venture; part of the shares. You know government normally owns 60 percent.

We can sell in an open tender be it Chinese. We can change the term and make it an operating one, just like what we have in NLNG. We also have another asset I think we don’t really need.

The African Finance Corporation; it can fetch them $800million 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, they should get anywhere between $12 billion and $15 billion,” Dangote had said.

Speaking at an event in Lagos recently, the Emir of Kano, Emir Muhammadu Sanusi II called for the sale of assets, and the provision of tax incentives for current and potential investors. Sanusi, who is the former governor of Central Bank of Nigeria (CBN), said that the assets can be sold with a plan to buy it back after sometime.

Watch it here:

Also, the National Economic Council (NEC), after their meeting on Thursday, approved the sale of national assets as a means to get the economy out of recession.

Other measures agreed upon by the NEC, were the implementation of Fiscal Stimulus/Budget Priorities, fast-track procedures through legislation and implementation of Strategic Implementation Plan (SIP) of the budget and meaningful diversification of the economy and cut down importation

The NEC consists of all governors in the federation and the CBN governor, with Vice President Yemi Osinbajo as its Chairman.

Manufacturers Association of Nigeria (MAN), Abuja Chamber of Commerce and Industry (ACCI), Nigerian Association of Chambers of Commerce Industry Mine and Agriculture (NACCIMA), the CBN governor, Godwin Emefiele, have all supported the call for sale of assets.

Eminent Economist and Managing Director Financial Derivative, Bismarck Rewane, speaking to Vanguard on the matter, 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.

Speaking to PREMIUM TIMES on Thursday, Lawyer and Human Rights Activist, Femi Falana said that the sale of the nation’s assets is “in total conflict with section 16 of the (Nigerian) Constitution which has prohibited the concentration of the nation’s wealth in the hands of a few people or a group. Indeed, by virtue of section 44 of the Constitution, the nation’s natural resources shall be held in trust for the Nigerian people by the federal government.”

He added that some legislators are planning to purchase the nations’s asset, and that the president should not sell.

“But for selfish considerations, a few legislators who may be queuing up to participate in the purchase of the nation’s assets are not prepared to defend the Constitution.

If the senate is genuinely desirous to contribute meaningfully to the debate on the economy, it should, as a matter of urgency, propose a substantial reduction in the jumbo emoluments of federal legislators which are said to be the highest in the world,” Falana said.

Falana advised the federal government to recover huge bailout funds given to banks and private companies during the tenures of Sanusi Lamido and Chukwuma Soludo as CBN governors. He also said that the federal government could liquidate toxic debts worth ‘over N5 trillion’.

BNers what do you think?