Archive ‘Selling national assets will be a colossal waste’ –...

‘Selling national assets will be a colossal waste’ – Adeniyi, Economic Development Expert

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Seye Joseph

The Centre for Global Solutions and Sustainable Development (CENGSSUD) has strongly opposed the proposed sales of National asset to fund 2016 budget and sustain the foreign reserve. The call is not only short-sighted, but unsustainable.

This was made known in a release by the Executive Director of the organisation, Adebowale Adeniyi.

Adeniyi gave example of the past similar assets have been sold such as Power Holding Company of Nigeria and NITEL that did not yield positive results which its proceeds of sales were squandered and unaccounted for and made many Nigerians to lose their jobs as a result of these sales.

“So how can a government that is determined to solve unemployment problem take decisions that will worsen it? he asked.

“While we sympathise with the Federal government on the unstable economic situation it has found itself which has led to recession, and its efforts to boost its revenue base, by diversifying and improving taxes and rates generation, the government should be cautious not to be too desperate in getting out of recession on time by adopting quick and short-cut fixes which may address the needs of the nation today, but may not be visible and viable to address the needs tomorrow.

Adeniyi said it is disheartening and worrisome that viable asset like the NLNG that rescued Nigeria in mid-2015 when 27 of the 36 states in Nigeria were unable to pay workers’ salaries, is up for sales.

“The Proceeds from NLNG amounting to $2.1billion (N413.7 Billion) was used as a bailout fund to various states. The asset also yields over $1 billion to the nation every year and has been doing so in the last 12 years which shows how viable and valuable such asset is.”

The development consultant asked if the NLNG and other national assets have been sold by previous administrations, what would have bailed Nigeria out in 2015? Or if all assets have been sold, will this present government have anything to turn to in-terms of sales? Also if assets are sold today, do we have perfect and systemic institutional framework in-place for the effective usage of the funds?

Even selling of oil assets in the era of drastic decline in the international price of crude oil would amount to a great loss to the nation.

“The CBN Governor, Godwin Emefiele also recently admitted that if the oil assets have been sold like two years ago, we could realise up to $40 billion, but now, if we sell, we can hardly realize between $10 to $15 billion, so why the rush to sell our valuable national asset at a loss and giveaway prices? This is simply penny-wise and pound-foolish.”

He frowned on the call of FG that proceeds from asset sales will be used to fund the 2016 budget because all the mechanisms proposed by the government to fund the 2016 budget are still in place but only the oil revenue drops as a result of the economic sabotage and activities of the Niger Delta Militants.

Adeniyi reminded FG that the oil-related funding component of the proposed budget is just N820bn, representing 13% of the entire spending plan of N6.08 trillion. So if the non-oil revenue such as Company Income Taxes (CIT), Value Added Tax (VAT), Customs and Duties, FG independent Revenue, internal and external borrowing, recovered funds from looters etc. are still in-place and covering about 87% of the funding for the budget, so why will sector with only 13% funding projection hold our budget to ransom and necessitate selling our important national asset?

“Even the oil revenue which the FG has been using as excuse has not completely stopped, the income only reduce by half, so we still realise income that can take care of at least 6.5% of the projected 13% we need from oil.”

He further reminded the government that the nation’s appetite for foreign goods and importation is still very high, even importation of refined oil being the biggest headache.

“90% of our foreign exchange from exports comes from oil, and Nigeria is not yet an exporting Nation. So if we sell our National assets and raise like $20 -$25 billion to boost our foreign reserve and our appetite for importation has not reduced by now, export not yet improved, with the present conflicting forex, monetary and economic policy frameworks, then the reserve will be dried-up again and fund realized from asset sales may go into extinction and we will be back to square one, or if we sell national assets to fund 2016 budget and economic problems still persist, what do we sell to fund 2017 and 2018 budget?“

He called for urgent concession of the four refineries to private operators to develop, operate and maintain the ailing infrastructures for production of crude oil to achieve their maximum capacities is crucial at this time to reduce need for Forex for fuel importation and solve drastic fall in the Naira value.

He pointed out that the government also needs to put all measures in-place to solve the crisis in the Niger delta region as military option may not be practical and workable. If previous governments from Late president Yar’ Adua can do it, former president Jonathan can achieve peace, then Buhari should not be an exemption.

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