Sale of Nigeria’s assets
Sir: The recent heated debate on the sale of government assets or as they say “national treasures” is very unfortunate. Like most national debates in Nigeria, it is based on sentiments and perception rather than accurate facts and the underlying numbers. You hear talk of ‘having treasures we will bequeath to future generation’, or ‘why sell off assets to solve short-term problems’?
The truth of the matter is recession or no recession, Nigerian government has no business running oil companies. The pretence by government that it is controlling the oil companies in Nigeria is doing the country more harm than good as it introduces government inefficiencies and corruption into the system while really controlling nothing.
According to The Nigerian Guardian: crude oil production from the joint venture between NNPC and the international oil companies (IOCs) have declined by 47 per cent due to the inability of the federal government to provide its own funding through the national oil companies. As at January 2015, NNPC is indebted to about $5 billion in cash calls to its JV partners.
The only persons benefiting from the so-called national treasures are top government officials and government appointed directors that line their personal pockets and turn a blind eye as the operators take more than their share of the profits one way or the other.
The only reasonable thing to do is to sell the assets to the private sector and let them worry about efficient production and cash calls. The government would just sit back and tax them “appropriately”.
One major consideration is that we should be thinking about where our tomorrow’s money would come from not where money came from yesterday. We should be watching where the global energy is heading long-term and the push for clean renewable energy. It would make sense to sell the oil assets at a premium sooner than later.