Selling Nigeria in national assets

My take on the raging controversy over whether or not to sell Nigeria’s national assets is that there seems to be a sinister motive behind the sale. Those angling to sell or buy Nigeria’s cherished national assets don’t seem to believe in Nigeria. They don’t seem to believe that there is a future for Nigeria. For them, the Nigeria they know and believe in is the Nigeria of today. What you call Nigeria, in their mind, may evaporate into another “there was a country”, in the words of Chinua Achebe.

That is why they want to sell off whatever assets belong to the country so that when it comes to pass that there was once a country called Nigeria, they will live and own those assets in whatever new political entity they find themselves. Otherwise, why should any patriotic citizen contemplate selling of our national assets in the guise of tackling recession?

Latching on the current economic downturn as reason to sell the assets is just a ploy because Nigeria is not the only country currently in recession. Nigeria is just one out of a host of countries that are now in “the recession club”. None of those countries has put up its priced national assets for sale. What the countries are engaged in is critical thinking to devise creative strategies to boost production. Selling of national assets is tantamount to cutting the head because one has headache. The Igbo say a madman sets his house on fire to allow more light!

The five countries currently with the worst recession, according to BloombergMarkets, are Venezuela, Brazil, Greece, Ecuador and Russia with 2016 Gross Domestic Product (GDP) forecast of -3.3%, -2.5%, -1.8%, -0.5 and -0.5 % respectively. These countries have recession probability of 75%. Nigeria, on the other hand, is not in red in the recession projection. The Bloomberg statistics puts Nigeria near the green band with 4.4% 2016 GDP forecast below Qatar with 4.5% and above Nicaragua and Ireland with 4.2% and 4.1% respectively. Nigeria’s recession probability was given as 10%. The only difference is that Nigeria’s recession is compounded by Boko Haram insurgency in the northeast, militancy in the Niger Delta and abrasive corruption. Otherwise, Nigeria is still on a far better footing than most countries in the red band.

For instance, compare Nigeria’s 10% recession forecast with Venezuela’s 75%, which is the worst case scenario. India, Vietnam, Bangladesh, China, and Sri Lanka have GDP forecast of 7.4%, 6.6%, 6.6%, 6.5% and 6.4% respectively are among the few countries that have better forecast than Nigeria. While India has 0% probability for recession, the other countries have 12%. Kenya is the only sub-Saharan African country with 6.1% and a 5% probability for recession. South Africa has 1.4% and 25% recession probability, which makes Nigeria better off.

Based on the foregoing, how many of the countries have put up their critical national assets for sale? Whereas Venezuela’s inflation rate is the highest in the Americas soaring at 180.90 % as at December 2015, Nigeria’s inflation rate as at Q3/2016 is only 17.9%.

In dealing with recession in Nigeria, it is pertinent to examine how Venezuela, the worst case scenario, is tackling the problem. Has Venezuela, a major oil producer like Nigeria, put up her critical national assets for sale? If not, how is the country grappling with the worst recession that has hit its economy?

Venezuela’s economic model under recession revolves around principled strategies. President Nicolas Maduro started by declaring economic emergency as inflation skyrocketed and basic food staples disappeared. Nigeria’s President Muhammadu Buhari has not yet declared an economic emergency probably because, as I said earlier, Nigeria’s recession is not among the worst. Though inflation rate has risen, basic food items are still available. President Buhari should declare a state of economic emergency to start with.

Venezuela’s president has an economic team that is brainstorming the recession. Does President Buhari have a capable economic team? Who are they?
President Maduro dared the opposition to privatise public housing, which is part of Venezuela’s critical national assets. The mere thought of privatising public housing triggered mass protests in the country. All the houses belonging to the Federal Government in Lagos and Abuja have already been sold to individuals through monetization.

Whereas, the Venezuelan President vehemently opposed the privatization of the country’s public housing assets, Nigeria’s president is being prodded to sale the few remaining national assets like NNPC and NLNG, which are performing assets. The refusal by Venezuela’s president shows that selling of national asset offers no solution to the recession.

Venezuela’s president supports raising the price of its highly subsidised petrol price. Nigeria has already raised the price of petrol and even contemplating hiking it again.In Venezuela, the opposition controls the parliament which makes it difficult for the president to have easy sail. On the other hand, Nigeria’s ruling APC party, controls the National Assembly, which makes it easy for the president.

Tax reform is one strategy Venezuela has applied to deal with her recession. In Nigeria, taxation remains an untapped source of public funds because government has not devised the right framework for getting people to pay tax, particularly, the super rich.

Finally, boosting production is one major option Venezuela is pursuing to rebound the economy. But Nigeria is paying lip service to boosting production because the needed infrastructure is lacking. Electricity is epileptic hence, industrial production is near zero.

As countries deal with economic realities, there comes a time when, either by their own self-inflicted pains or externally-induced shocks slip into recession. All the big Western economies have, at one time or the other, gone through recession. Between 1836 and 1933, for instance, the United States experienced 25 recessions, including the Great Depression of 1930-1933. Similarly, the Euro zone countries have at one time or the other been in recession.

Nigeria is, perhaps, having her first test of recession since independence. This might not be the last recession the country would have. The remaining national assets should be spared because there is no faith in a country without assets.

Countries that have had recession often come out stronger due to the proactive policies put in place that wouldn’t have been there without the recession. Therefore, recession is not a death knell on any country. All that is required is unrelenting thinking devoid of egocentric or ethnic maneuvering.