The National Bazaar

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Monday Discourse
The call for the sales of national assets appears to have gained considerable popularity amongst the ruling elite, but not amongst the voting population, write Shola Oyeyipo and Segun James
A very fierce debate is currently going on among the Nigerian political elite. It is a discussion that borders on whether or not the President Muhammadu Buhari-led government should sell off some of Nigeria’s assets to reduce the effects of the economic hardship at the moment and also to bring the country out of recession.
Though some persons, including the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, had mooted the idea long before now, the issue took the front burner following the position taken by a Nigerian business mogul and Africa’s supposed richest man, Alhaji Aliko Dangote, who noted that Nigeria needs $15 billion from asset sales and borrowing to revive its collapsing economy and to enhance foreign reserves as a way to revamp the economy.
“Through sales of assets, through loans from Bank of China or wherever, we need something like $15 billion,” Dangote had noted during an interview with Bloomberg TV at the US-Africa Business Forum in New York, stressing further that “We are having a problem as the reserves are low. The banks, entrepreneurs, everybody is speculating on the currency.”
In what became a subject of frontal attack by those opposed to the suggestion, Dangote maintained that if it were in his business environment and he was faced with similar situation, he would “not hesitate to sell assets to remain afloat, and to get to the better times”, stressing that “It doesn’t make any sense for me to keep any assets and then suffocate the whole organisation”.
According to him, “We have a lot of assets to sell. We can sell part of the joint ventures, or part of the shares. My suggestion before was that they should even sell 100 per cent of NLNG. I don’t think government should be in any business of investing in sectors like LNG”, noting also that “The only way for us to get out of this recession is to make sure we move into action quickly by diversifying the economy”.
Some of the assets recommended for sale by Mr. Reno Omokri, amongst others, are government’s shares in Joint Venture Companies (JVCs), government shares in Nigeria Liquefied Natural Gas (NLNG), some aircrafts in the presidential fleet, Kaduna refinery, Warri refinery and Port Harcourt refinery among others.
Obviously, the Nigerian economy has been badly hit by low oil price; fast reducing foreign investment and unfortunately, Nigeria’s foreign reserves have fallen by more than a third since the end of September 2014 to $24.8 billion (more than 10-year low). Worst still, the naira has fallen by almost 40 per cent against the dollar in 2016. Dangote is rated by Bloomberg Billionaires Index to be worth about $10.9 billion and it is estimated that he has lost money in the range of $4.4 billion since the end of 2015, due to naira depreciation.
The Buhari administration is expecting to spend its N6.1 trillion ($19.4 billion) budget to engineer the processes that would facilitate growth as it plans to raise about $4.5 billion of concessional loans and Eurobonds to aid payments for its expenditure plans.
While Dangote himself would have seen that his suggestion was not well-taken by many Nigerians, who considered it as an asset-stripping strategy by some few mega-rich Nigerians, the fact that the Senate President, Dr. Bukola Saraki and some state governors supported the suggestion, which also had the backing of the federal government and the National Economic Council (NEC), had generated various reactions from opinionated Nigerians, who are strikingly divided over the matter.
Just to mention a few, there have been a lot of voices contributing to the discussion from opponents and proponents of the idea. The likes of Lagos lawyer and human right activist, Mr. Femi Falana (SAN), both the Joe Ajaero-led and the Ayuba Wabba-led factions of the Nigerian Labour Congress (NLC), the Trade Union Congress (TUC), the Lagos Chamber of Commerce and Industry (LCCI), the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Catholic Church and several Civil Society Organisations (CSOs) have all condemned the suggestion.
Others like the former Minister of Petroleum and Energy, Prof. Tam David-West; revered economist and Managing Director, Financial Derivative, Mr. Rewane Bismarck, the Deputy Senate President, Senator Ike Ekweremadu; Senator George Akume, the Executive Director, African Centre for Leadership, Strategy and Development, Dr. Otive Igbuzor; Senator Andy Ubah, the Majority Whip, Olusola Adeyeye, Senator Shehu Sani and so many more, have urged President Buhari to do away with the idea.
On the other hand, the Emir of Kano and former governor of the CBN, Alhaji Sanusi Lamido Sanusi (II), Emefiele himself, the Abuja Chamber of Commerce and Industry (ACCI), the Manufacturers Association of Nigeria (MAN) and the state governors are for it.
Arguing in favour of the sales, Emefiele said: “In the short run, we can sell assets. You will recall that as at April 2015, I had an interview with Financial Times of London during which even before the government came on board, I had opined that there was need for the government to scale down or sell off some of its investments in oil and gas, particularly in the NNPC and NLNG as at that time, when the price of oil was around $50-$55 per barrel. We actually commissioned some consultants that conducted the study and at the end of that study, we were told if we sell 10 per cent to 15 per cent of our holding in the oil and gas sector that we could realise up to $40bn”.
MAN president, Dr. Frank Udemba Jacobs, however did not leave Dangote alone to defend his suggestion because according to him, “Dangote spoke our minds. We are not saying government should sell its shares completely in NLNG. NLNG is worth $15 billion, so they can sell part of it and still maintain some level of ownership. That is what we are saying and by so doing, we’ll generate money to beef up our foreign reserve and engender confidence of the investing community both domestic and international in the economy.”
Sanusi, on his part, said: “The immediate oxygen that this economy needs is foreign exchange and portfolio investors. Now, do we really have a flexible exchange rate? That is what we need to look at. These things require courage because some of the decisions you would take would seem to fly in your face in the first week or two.
“It is the inflow of dollars into the economy that would move the naira towards its fair value and for it to get to where you want it to be. We need to sell down some oil assets and sell down some refineries in a transparent manner that gives you value. You can even have the option of buying back later. But basically it helps you raise revenue.”
But on the contrary, while noting that the United Arab Emirate (UAE) does not allow anyone close to its oil wells let alone sell them,” Ewerenmadu said “For a country like Saudi Arabia, its budget each year is run by investments from oil revenue. Other countries are investing. I am sure we will not be fair to the next generation if we sell off our assets. If we must sell, we have to sell the non-performing assets so that people can turn them around and create employment.”
For West, “It’s madness to say you want to sell NLNG and the refineries. Why not say Nigeria, too, should be sold? Yes, recession is biting, and it is a desperate situation. But, anyone who acts desperately in a desperate situation will be in more trouble. If you have a desperate situation, don’t act desperately. When you act desperately, you are going to make more mistakes.
“In any case, oil and gas are strategic national assets, so, anyone who talks about selling them is unpatriotic. Oil makes up 90 per cent of Nigerian foreign earnings. About 80 per cent of our annual budget in this country is from oil. Oil is the life blood of Nigeria. Anyone that says, ‘go and sell oil asset’, which is a strategic asset is not patriotic or does not understand what he’s talking about. If you want to destroy Nigeria, go and tamper with oil industry. We are finished.”
Rather than tinker with assets sales, West suggested that
Nigeria could get out of the recession by leasing oil blocs that have not been developed to the maximum and those that have not been touched. He added that Nigeria could get loans that should be repaid with crude oil over a period of time. He recalled that it was done when Buhari was Head of State in 1984, “and it can also be done now”.
For Bismarck, who also described the NLNG as a “cash cow that should not be sold”, he said he would only support the idea of sales 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”.
Omokri would rather President Buhari do away with five things first before he sells the country’s assets and those are: 10 presidential jets, tens of his luxurious cars and presidential guest houses in various states, the 50 per cent of his annual basic salary earned as ‘hardship allowance’, and sponsorship of pilgrimage either directly or indirectly.
Mr. Falana said, instead of selling the nation’s remaining assets, the federal government could liquidate “over N5 trillion” of toxic debts and also recover huge funds that were given as bailouts to banks and other private companies during the eras of Sanusi Lamido and Chukwuma Soludo as CBN governors.
Legally, he said the move is not in consonance with the letters of Section 16 of the (Nigerian) Constitution which prohibits the concentration of the nation’s wealth in the hands of a few people or a group and Section 44 that provides that the nation’s natural resources shall be held in trust for the Nigerian people by the federal government.
 “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.”
The Fear Factor and Yar’Adua’s Example
Some of the repercussions being feared by those oppose to the idea of assets sales are that the sale of refineries, for instance, might lead to an increase in fuel price. It could also bring about the loss of thousands of jobs. The possibilities are also that selling the assets may continue the trend of inequality and joblessness because the NLNG is one of Nigeria’s biggest oil companies, employing a large workforce of Nigerians and most buyers engage in asset-stripping.
So many other previous assets in Lagos and other cities were basically undersold to many public officers and their cronies. A case in point was the eventual recovery of the NET building in Lagos, which was sold to the father of a legislator for N4 billon instead of the market value of N75bn.
The sale of the other 531 Nitel properties and other agencies of the federal government located in the various parts of the country have not been accounted for and till date, the Daily Times, which was sold to Fidelis Anosike’s Folio Investment Company has remained moribund, with the new owner still struggling to find his feet.
What further heightens the fear among Nigerians is simply because after former president Olusegun Obasanjo sold some refineries, when the late Umaru Musa Yar’Adua came into office, he reversed the sales and became obvious that most of the sales were fraught in irregularities.
Yar’Adua overturned the sales of the refineries to Dangote and others which included the former Vice-president Atiku Abubakar’s official guest house, which he declined in a memorandum and asked Obasanjo to leave it for the use of the incoming vice-president. But as the chairman of the committee on the disposal/sales of government houses in the FCT, Governor Nasir el-Rufai, under its monetisation programme, sold it to himself. That and houses sold to former president Obasanjo’s aides were cancelled.
Recall that the labour strike in the country back then was as a result of the call for the Yar’Adua government to reverse the sale of the refineries among others as they saw it as the biggest rip-off of Nigerians ever in the history of privatisation.
 
The Debate Proper
A Logos-based businessman and Chief Executive Officer, Asa-Mike Company Nigeria Limited, Mr. Mikee Alia is of the opinion that government should enunciate what the benefits of the previous assets sold are to Nigeria.
“We sold some of our national assets during the Obasanjo regime and what did we get from there? And now, you want to sell another one. They should give account and tell Nigerians the benefits of the ones we sold earlier. We should look back before we leap forward because for instance, as a father, if my child needs money and I say take the television and sell it. He goes and later comes back to say give me the fan, I will insist he tells me how he managed the money he got from selling the television. We must endeavour to leave something for our children to see.
“President Buhari must be wary of past hurdles, where others fell. The president is not interested in selling the assets. It is the people around him that are propping up the idea because some people just want to get richer,” he argued.
A retired Navy officer, Mr. Olomi Fadile is of the opinion that selling the asset can also help the country bounce back economically if resources accruable to the nation are well-managed.
“You must use what you have to get what you want. The government is in dire need of foreign exchange to reflate the economy and a very simple way to do that is to sell some national assets. I don’t see any problem with that. The only problem with Nigeria is corruption and since the current administration has shown a sign of readiness to fight corruption, my take is that we should all follow-up and supervise how the money is spent,” he said.
Alhaji Samaila Sifawa, a political economist based in Abuja, said “That call is certainly selfish,” insisting that what the nation needed was backward integration.
“Let’s go back to the land and invest the entire 2017 budget to agriculture, education, health and infrastructural development. That way, we would be out of the woods in no time. Selling our national assets is not the answer.”
Chief Layiwola Ishola and Alhaji Bashir Alimi, thought the call by Dangote for the nation to sell its assets in the oil sector is the most selfish call.
Ishola said, “Because of his political connections, Dangote has bought the entire country. He has pushed out his rivals in the cement industry. Where is Ibeto cement? The man was ruined because of Dangote. Now, he wants to buy other sectors. Very soon, Nigeria would simply change its name to Dangote and all of us his subjects. He is selfish.”
Alimi, on his part warned Dangote not to believe that he would always have his way with the nation. “Any political misstep may ruin him. He is certainly threading towards that area.
Mr. Akpor Mukoro begged Dangote to go ahead and buy into the oil industry. He was of the opinion that the business mogul needed not buy federal government property in view of the politics and sentiments involved.
He thought it was such sentiment that persuaded Dangote to site his multibillion dollar refinery in Lagos, instead of the Niger Delta area.
But an ex-militant warlord, Commander John Johnson said they would be waiting in the creeks for anybody, who buys the assets. He stressed that even now, they were targeting assets of the multi-national oil companies because they have never benefited, warning that anybody who buys the assets would have them to contend with.