NLC may sue government over sale of national assets

• StanbicIBTC boss backs disposal of refineries
• Faults divestment from NLNG

The Nigeria Labour Congress (NLC) might drag the Federal Government to court over proposed sale of some national assets.

Speaking yesterday in Abuja while inaugurating a 10-man NLC-Academic Staff Union of Universities (ASUU) think tank on socio-economic issues, NLC President, Ayuba Wabba, said: “Between last week and today, more than 20 lawyers have told us there is a legal angle we can explore to stop the sale of assets by the Federal Government. They also assured us that they would be ready to defend the Nigerian people against the sale of our common patrimony.”

Wabba, however, said the NLC was not opposing the sale without an alternative. He said Congress was ready to canvass options that could bail Nigeria out of the current economic crisis.

Sale of the nation’s refineries, however, would provide funds for the Federal Government to pull the economy out of recession, said chairman, StanbicIBTC Holdings Plc, Atedo Peterside.

In a prescription on how to end the downturn, made available to The Guardian on Monday, he said what Nigeria needed was “a combination of well thought out, calibrated, and properly sequenced fiscal and monetary policies, supported by the right mix of macro-prudential tools.”

He, however, said any sale of assets must pass a three-way test of bringing in foreign exchange (forex); improving efficiency; and reducing drain on existing resources.

Peterside noted that the sale would provide the economy with fiscal stimulus, since government “has no net savings to draw upon, and our external reserves have fallen dangerously low (below $25 billion). The Federal Government faces a rising local debt burden, which can only become progressively burdensome on account of high nominal naira interest rates, which are still necessary to contain inflation and help douse exchange rate pressures. The harsh reality is that the foreign exchange scarcity will continue to bite for a while because business confidence is exceedingly low and investors (local and foreign) have lost faith and now prefer to delay forex inflows.”

Also, a development specialist, Paul Akeni, said: “It is on record that government has the highest uncompleted projects, which when sold could boost the economy. If all these structures are properly audited and sold, they could be converted to social projects or economically viable ventures that would create employment and boost our gross domestic product.”

To sell or not to sell has become a hotly debated issue across the nation. Senate President, Bukola Saraki, and business mogul, Aliko Dangote, back the disposal of assets, particularly equity in the Nigeria LNG Limited (NLNG). Others, however, express concern the idea could be tainted by corruption.

The Monetary Policy Committee (MPC) of the CBN recently brushed aside some ill-advised public pleas for a drop in interest rates in the face of stagflation. Monetary and exchange rate policy, based on a sound theoretical underpinning such as the Mundell-Fleming Trilemma, is clearly not everyone’s forte.

Peterside maintained that it would be a huge mistake for government to divest from a very viable venture, like the NLNG. He said, rather, it should replicate the liquefied natural gas model in the existing joint ventures (JVs), to free itself from the burden of cash calls.

He said: “I would not advocate the sale of a ‘cash cow’, like the Federal Government’s stake in Nigeria LNG (NLNG) at this time because it does not pass the second and third pillars of my three-way test. Conversely, I would advocate the replication of the very successful NLNG model, where the Federal Government’s stake is capped below 50 per cent across the oil producing Joint Ventures (JVs).