Date: 2016-09-21

There are growing calls on the federal government to sell critical assets as part of measures to take the economy out of recession.

The latest came from the Senate President Bukola Saraki yesterday, just a few days after 'richest man Aliko Dangote made a similar suggestion. But the Revenue Mobilization Allocation and Fiscal Commission yesterday rejected the suggestion, saying doing so would be unwise.

Saraki, who made his suggestion in an address at the resumption of Senate from an extended recess, said the executive must raise capital from asset sales and other sources to shore up foreign reserves. "This will calm investors, discourage currency speculation and stabilize the economy.

"The measures should include part sale of NLNGHoldings; reduction of government share in upstream oil joint venture operations; sale of government stake in financial institutions e.g. Africa Finance Corporation; and the privatization and concession of major/regional airports and refineries," he said. Saraki said the Executive must immediately put in place leadership-level engagement platform with the private sector.

"This must be one that is pro-business and shows unequivocally that government is ready to partner with the private sector towards economic revival. "This is a critical signpost towards market confidence which is a key ingredient to help us revamp the economy out of recession, "he said.

According to him, "The Executive and CBN must agree on a policy of monetary easing to stimulate the economy and harmonise monetary and fiscal policy until economic recovery is attained. "We must ensure local government borrowing does not crowd out credit for the private sector.

"The Executive must re-tool its export promotion policy scheme with export incentives such as the resumption of the Export Expansion Grant (EEG); and introduce export-financing initiatives." He also urged the Executive to engage in dialogue with those aggrieved in the Niger Delta and avoid an escalation of the conflict in the region.

"The National Assembly is very ready to play any role in the process and offer ideas on approaches that will deliver quick win-win in order to move the region and the economy forward," he said. On budget, Saraki said the Executive must consider immediate release of funds to resuscitate the economy.

He said the agricultural sector and the agro-allied businesses should be directly supported to boost value addition and job creation. To his colleagues, Saraki said, "On our own part, we must turn our attention towards a number of legislative priorities such as the Petroleum Industry Bills. We must ensure the passage of the PIB as soon as possible to stimulate new investment and boost oil revenue.

"Mortgages remain key for us in the National Assembly and we will immediately begin the process of accelerating bills aimed at reforming the sub-sector for growth and accessibility in a manner that deepens our people's access to housing, jobs and economic activities that can inject fresh funds into this sector."

He reiterated the readiness of the Senate to receive and consider expeditiously additional proposals from the Executive to create a new Nigerian economy and get the country out of recession as quickly as possible.

"However, even as desperate as our people may be for solution, I did not feel that what they expect from us is a miracle. I believe what they want to see is that as leaders, all our hands are on the deck. They don't care about our politics; they don't care about our political affiliations; they don't care if we are APC or PDP; north or south; Christians or Muslims. What they want is for us to lead the way out of this crisis and deliver on the promises that we made to them, "he said.

RMAFC disagrees

In a press statement the RMAFC Acting Chairman, Shettima Umar Abba Gana, argues that it would be unwise for the government to dispose of its "crown jewels that generate revenue and keep the Federation Account healthy over the long term." Citing the NEITI 2013 audit and financial report of Nigeria's oil and gas industry, RMAFC disclosed that the sum of $12.9 billion was received by NNPC from the Nigeria Liquefied Natural Gas (NLNG) Company over an eight-year period which the Corporation did not remit to the Federation Account. The audit according to the Commission also revealed that Nigeria Liquefied Natural Gas (NLNG) Company paid the sum of $1.289 billion as dividends for 2013.

"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.

It would be recalled that Mr. Godwin Emefiele, Governor of the CBN, indicated in a media report that the sum of $10bn would be realized from the sale of these assets. The commission is of the opinion that the same amount could be borrowed from the IMF and the revenue from these Assets could be used to amortize the loans over an agreed period.

The commission advised that instead of selling off such vital assets Nigerians should be encouraged to set up their own LNG projects, since 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.

A newspaper report last month said Buhari would be seeking emergency powers from the National Assembly to get the economy out of recession, shore up the value of the naira, create more jobs, boost foreign reserves, improve power and revive the manufacturing sector.

The report said the decision was based on a proposal from the economic team headed by Vice President Yemi Osinbajo. The report quoted government source as saying about nine government assets may be leased or sold to generate around $50 billion to shore up the nation's foreign reserves and the value of the naira against the United States dollar. But the Presidency denied the report.

The Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, said in a statement then that the economic management team was considering several measures to urgently reform the economy but they had not yet been communicated to the president. He said those measures had also not been passed to the Federal Executive Council and the National Assembly.

An official of the Natural Resource Governance Institute, Dauda Garuba, said in his opinion, the government doesn't need to completely sell its oil assets but should consider relinquishing some of the stake in the assets to allow more participation of the citizens.

He said this will help deal with the issues of corruption and the mismanagement of such assets, and at the same time fetch some monies for government. He said going down to history, all the assets sold during former president Obasanjo, where are they now? These are national heritage and government should preserve them.

Also commenting, Bismarck J. Rewane, CEO, Financial Derivatives Company Limited, said the sale of the assets will help to boost reserve but at the same time, government should have a programme of repurchasing the assets when things become normal for the economy.