It’ll be historic mistake – Soludo

Sani: We may sell Coat of Arms to fund 2017 budget

Sale required to finance revenue loss – FG

APPARENTLY worried by recent media reports that federal government had concluded plans to sell national assets, experts have risen in stout opposition against such moves by President Muhammadu Buhari, stating that the country would be mortgaged.
This is just as the worsening state of the economy and inconsistent government policies are attributed to a number of incompetent aides and ministers currently serving in this administration, the experts also stated.
From all indications, the president is under immense pressure to bury the idea of selling any national asset but to find ways of solving the worsening economic situation without mortgaging the nation. “No one president can sell a nation’s assets.
You can’t sell assets of a nation because you are in power; there has to be a consensus,” Odilim Ewengbara, a developmental economist stated in Abuja. Ewengbara stated that (former) “President Olusegun Obasanjo did it when he sold some refineries to few Nigerian businessmen at the twilight of his administration, but his action was immediately reversed by his successor, late President Umaru Musa Yaradua.” Similarly, as the present administration’s inability so far to turn the economy around becomes more glaring, inept advisers and cabinet ministers in government are allegedly responsible for the crisis. At a roundtable in Abuja, some legal experts stated that though President Buhari might have attempted to get honest persons to run his administration, a great number of them are incompetent. The legal practitioners noted that part of the policy summersaults of government was a result of this misnomer. According to them, “Buhari may be surrounded by honest persons but incompetent. You can be a bad person but when you are encircled by good persons and good ideas, you can and with your policies churn out something good; but when you are good and surrounded by bad persons and advisers you can be bad and your policies too,” they said in unison. However, dwelling on the economy and suggestions that national assets be sold to revamp the economy, Ewengbarra explained that it was dangerous to allow few persons to take over or hold the nation’s economy. He argued that beyond monopolising the system and economy, the few monopolists would also want to control everything, including the government. “It is dangerous to allow one or two persons or a group of persons to hold our economy or take over it; he or they will control everything, including government.” According to him, those who want the recession are those asking for assets to be sold, stating that the private sector stifled the economy during the past administration of Dr Goodluck Jonathan. “Businessmen, private sector stifled economy during Jonathan,” stressing that “any person interested in our economy can come in; don’t bring in private sector; they are only interested in their pockets,” he further said. The developmental economists, however, noted that selling government assets would not bring the country out of recession but rather such assets could be a money-spinner in restoring the economy if the right decision could be made by this administration.
He added that no nation had ever done away with its assets because they not only show the credit worthiness of the country are a generational assets. Speaking further, he urged government to commercialise the assets instead and bring in notable and competent Nigerians to manage them through concessionaire. Similarly, he advised government to borrow from the Chinese for capital development to make up for the country’s infrastructural deficit and allow the Chinese firms to carry out the projects themselves. On calls for the removal of the budget and finance ministers over incompetence, he described the Budget and Planning Minister, Senator Udoma UdoUdoma as a mismatch and that the Finance Minister, Kemi Adeosun, does not understand Nigeria’s politics. Other experts who gave insights on the state of the nation included Barristers Tochukwu Okorie and Daniel Bwala. Selling national assets will be a historic mistake, says Soludo The federal government will be repeating mistakes of the past should it sell some of the nation’s assets as has been proposed in some quarters, former governor of Central Bank of Nigeria, CBN, Prof. Chukwuma Soludo has said. Asset sale has recently emerged as one of the strategies for Nigeria’s quick exit from its current economic recession, and notable public figures have argued for and against the proposal. Soludo said he initially labelled the asset sale suggestion a “joke” when it first began to emerge, but when the Senate and NEC joined the “convenient but flawed call”, he decided to lend a voice to the matter. He said that although he would ordinarily not join issues, the matter in question was “critical,” especially due to the assumption that the move would help to “build reserves and provide funds for immediate spending,” and thus ensure that this recession would be the “shortest” ever. “Part of the legacy of the oil resource curse on matters of public finance is a mindset that resorts to easy, albeit lazy approach to ‘quick fixes’ — with a gaze on the short term even when the issues are structurally long-term. So, I understand the mental framework that drives such a proposal especially given the pressures to show immediate results,” he said. “But for the record, it is our considered view that the proposal is based on a false foundation. Our thesis is that in extreme, exceptional circumstances, sale of certain assets could be a last resort option but that Nigeria is currently not near that threshold and the institutional framework for its effective use is also not in place. Instead, he argued that there was more to investor confidence than temporary boost in stock of reserves when everyone knows that the underlying political environment as well as the policy regime and its credibility make the flow of reserves unsustainable. “The argument that sale of assets is the only way to reflate the economy out of recession is troubling, and suffers what economists might call policy myopia or time inconsistency problem,” he said. “First, imagine if previous governments used asset sales as a strategy to ‘reflate the economy’ during previous periods of economic recession or crisis. Alternatively, if we auction away some valued national assets for the short term goal of reflating the economy out of recession, what will happen during future cycles of recessions and
economic crisis? “The global economic system is inherently and cyclically crisis-prone. Prudently managed economies are preparing for the next cycles of global crisis, and the IMF has already warned of persisting vulnerabilities. What shall we sell then?” He maintained that “a hasty auction of the assets” would short-change Nigeria, saying privatisation of national assets is not an ideological matter but plain pragmatism. “Reasonable people can have a good debate about the composition of public assets for sale at any time. Although government is yet to be definitive about the assets being proposed for sale, it is reasonable to object to any scheme that will hurriedly sell performing public assets that guarantee future flows of revenue and forex to future generations such as the NLNG, AFC shares, JVs in oil and gas sector, etc,” he said. “Even for non-performing assets, when privatisation is forced and assets auctioned on an emergency basis to meet short-term needs, the danger signs are there for all to see. Nigeria will never get value for money under the circumstance. We all know what happens when someone urgently needs to sell his or her property to meet an emergency. “What happens to the valuation/pricing? If we price them properly and wish to go through proper due process, the deal might take several years to conclude, thereby defeating the advertised purpose of immediate spending. On the other hand, if we insist on forced sale because we need cash urgently, we can as well imagine how the valuation will be done and how buyers will bid for them. ‘Buhari may sell our national anthem, flags’ – Shehu Sani For his part Senator Shehu Sani representing Kaduna Central senatorial district lampooned the President Muhammadu Buhari-led federal government. The senator criticised the federal government’s moves to sell national assets in order to revive the ailing economy. Sani had earlier declared that all those calling for the sale of national assets because of the present economic recession were “economic predators” carrying out “heists and roguery” agenda. According to him, the calls are attempts by these people to profit from the nation’s assets through the backdoor by buying it during a recession. Sani on Monday, September 26, wrote on his Facebook page: “If we have to sell our national assets to fund the 2016 budget; then we have to sell our coat of arms, national flags and anthem to fund the 2017 budget; as for the 2018 budget, the nation move from recession to receivership ,then we auction the whole territorial land mass of our country to the Bourgeoisie class to raise cash; then we all live on tenancy. This is what our ‘lumpen capitalists’ want.”
Sale required to finance revenue loss-FG Meanwhile, the federal government says the proceeds from the sale of some of the country’s assets would be used to fund the 2016 budget. It said while the government had mapped out key infrastructural projects that would support its economic diversification agenda, the shortfall in revenue had made it difficult for these projects to be executed. The Minister of Budget and National Planning, Senator Udoma Udo Udoma who stated this in a statement issued by his media adviser, Mr Akpandem James, explained that the government had lost almost half of its expected revenue this year. The minister explained that the unfortunate scenario was what prompted the Economic Management Team to urgently work out a fiscal stimulus plan to generate large funds to be injected into the economy. The funds, he noted, would be injected through proceeds of asset sales, advance payment for license rounds, infrastructure concessioning, use of recovered funds, among others, to reduce the funding gap. He said the primary objective of government’s fiscal stimulus plan was not to sell off all major critical national assets, but to source immediate funds to reflate the economy to the path of recovery. Also, the Minister of Finance, Kemi Adeosun spoke in support of the proposal for Nigeria to sell off some of its national assets to raise funds to pull out the economy out of recession, saying the move would reduce government borrowing. Stating this during a meeting with business editors at the weekend, Adeosun said, “The infrastructure challenges we face are so serious and the kind of money that we need, we can’t borrow because when you have an accumulated deficit, you need to look for the money that will sustain what you are doing for the next three to four years. So, that is what we are looking at and having a more strategic approach so that, over time, we will borrow less, which, of course, is good in the long run.” Answering questions on the suitability of selling off some national assets when some that had been sold in the past had not been properly managed, she said: ‘‘I think there are lots of assets being considered. There are some unused assets that are just lying idle and people have come and said, ‘These things you are not using, can we lease it from you?’ “I think when you are looking for money, some things that government is sitting on, we don’t have money to do them and so it makes sense for me to unlock those things as it will bring money to the economy at these difficult times so that we can move forward. I don’t think we have got to the stage where we say it’s this or that asset. The conversation now should be: should we just keep borrowing, or now that things have got to this stage, we should start to dislodge some under-utilised assets; and it’s not exclusive to us: Saudi Arabia is selling some of its oil assets. So if you sell an asset and use it to finance another asset which is going to give you more, then I don’t have a problem with that.” Adeosun also disclosed that there were some assets that could be leased out and some which might need to divest. “The investor will need to look at the risk and pricing accordingly. We can sell to the Nigerian people or the pension fund and you can also list these assets on the stock exchange. So there are different types of sales,” she explained.

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