The National Economic Council chaired by Prof Yemi Osinbajo, the Vice-President supported the plan of the Federal government to sell certain National assets as a way of raising cash to bridge budget revenue gaps. Dr Bukola Sarki, Senate President in his address at the reconvening of the Senate last week spoke along the same line. Since then all hell seems to have been let loose.
It is normal for Nigerians to express their opposition to government plans, for example as they did for a very long time over the full deregulation of the down-stream Petroleum sector. And indeed, like the long drawn opposition to the deregulation, the present opposition against the sale of National assets is cacophonous. Some of the arguments that I have read and heard seem based on emotions and look like misplaced aggression. Yes Nigerians are rightfully angry with the current hardship and the past failures of political leadership. The hope for positive change which they earnestly yearned for seems suspended, if not dashed. So they are highly irritable and it is understandable the kind of acrimonious debate I have heard in the last few days.
Most of the opposition seemed based on three pillars. One, what did we do with the National assets we sold in the past? Second, most of the past asset sales through privatization have not worked well, were cheaply sold to government cronies and surrogates. They point to NITEL, PHCN, Ajaokuta Steel Complex, etc.
Thirdly, they argue that selling particularly our oil and Gas assets like our shares in LNLG or divesting our holding in JVs will jeopardize our future earnings and leave nothing for the future generations of the Country. To be sure, these questions and worries are understandable as I said earlier on but, on close scrutiny, those pillars will crumble in the face of cold and evidence-based analysis.
Our economy is in deep recession and most Nigerians can already feel the pains. If you are not losing your job, your salary is late in coming, if you are not closing your business, you are having very low sales, if you are a housewife, your monthly house allowance can hardly last for two weeks, if you want to travel on holidays abroad, you probably will sell some personal assets and if you have money in the bank, it is loosing value everyday. No body is insulated. Even my Pastor is complaining.
Meanwhile Government revenue has dropped by nearly 50% and there is no hope in the horizon that this will change significantly anytime soon. At the same time Government has an ambitious budget of 6.6Trillion Naira, a third of which is supposed to be borrowed. But I can bet with all of my pension funds that under the current situation neither the full budget nor the portion to be borrowed will be fully or even substantially realized before the curtain is drawn on the 2016 budget.
So what does the government do? Sit back and hope against hope, sit back and watch Nigeria slip from recession to depression or continue to look back, blaming the past administrations? I believe that the damage to the present will imperil the future. This to me is why the government wants to do what it can to raise funds to fire the economy out of recession. If we do not survive in the present, how can we think of surviving tomorrow?
Secondly, should we prefer to leave huge debts in the future for our Children and also a bundle of idle and unperforming assets? I will prefer to leave my Children with little or no debts by realizing some of my assets to sort out current problems that will help them prepare for that future. One of the reasons for acquiring assets is to preserve wealth in times of excess cash and I do not see anything wrong in converting the assets back to cash when cash flow is diminished. Hoping that in future, should cash flow improve, new and perhaps better assets can be acquired.
Why can’t we sell such poor performing assets like the refineries, rail lines, airports and even sea ports. In the top leading Nations that we want to be like,these assets are in private hands and they are serving the Nationals. No body will export our airports, or sea ports, they will remain in Nigeria!
Thirdly, the question as to what we gained from selling the Nigerian Airways, NITEL, the unbundled PHCN, etc? My simple answer is that we at least gained the yearly National budget sums that were being wasted in running moribund and inefficient assets. We gained from the death of the corruptive activities involved in running these money-guzzling national embarrassments. We gained from the stoppage of regular disruption of essential services by chronically disgruntled staff who went on strike at the drop of the hat. That to me is a lot of gain, even if we sold the assets for free.
I believe that the arguments should be on which assets we want to sell and how we intend to apply the income. Government says they will invest on new assets- infrastructure. So what is wrong with selling some old assets to acquire more urgently needed assets? And in deciding which assets to sell, we must not be guided by emotions but by market conditions. Which assets will give us the best return at this time? If NLNG will give us the best returns, please let us sell. Who said we can not invest in new LNG and other such projects in the future that may turn out to be more profitable that the NLNG today?
Finally in making this case that we can sell whatever old assets we have to acquire newer and more urgently needed assets, I am assuming, one, that we have learnt from our past mistakes; two, that the pricing and sale of the assets will be transparently determined through globally competitive processes; three, that other Policy options will be applied to make Nigeria competitive and that in concert with the current ANTICORRUPTION stance of this government that there will be no conflicts of interest and primitive greed on the side of those with public trust.
Source: Businessday
