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Selling the state’s jewels


NNPC Headquarters

NNPC Headquarters

The Senate a short while ago spent a few short hours debating the state of the economy. They asked for a new economic team because they thought that the Ministers of Finance and Budget were not up to the task of pulling Nigeria out of recession. They recommended the sale of national assets such as NLGN, parts of NNPC; so as to boost our foreign exchange reserves. They also asked for the reduction of government spending, boosting agriculture and so on.

There was not one mention about cutting the expenditure of the National Assembly itself. I am not sure whether some of these assets could actually be sold as revenue from them is a constitutional matter.

It has occurred to me that other assets could also be sold. How about selling the National Assembly itself or selling the Central Bank? There would be quite a sizeable amount to be derived from these assets.

The National Assembly has spent countless hours debating the Petroleum Industry Bill PIB since 2006. The Bill has still not been passed. Our national economy and the recession merited a few short hours.

It seems rather odd that Nigeria is willing to sell our shares in Nigerian National Petroleum Corporation (NNPC) and the International Oil Companies (IOCs). If we needed to sell anything, should it not be the least productive assets, rather than the most productive assets and those that are still producing?

We could sell parts of Aso Rock and the Federal Secretariat. Do not be so shocked. There are precedents. Some of the British Queen’s palaces have been sold over the years. Near the Nigeria High Commission in London is a 5-Star luxury hotel: the building was part of the War Office (Ministry of Defence). Large parts of British Rail have been sold, especially the valuable land near stations and along the Rail lines.

If any of these assets in Nigeria are sold, who would buy them? Given our history of opaqueness with regard to disposal of national assets, your guess is as good as mine! Which assets are we considering to sell? Do they include the Ports of Lagos and Onne? Do we have any valuation of these assets or are they now to be valued? How long will the valuation take? Prospective buyers would, also want to do due diligence? Do we have enough records for this? Incidentally we have been through this road before. We sold Peugeot, Volkswagen, Trade Fair complex, Ajaokuta Steel Mill, Aluminium Sorelter Plant, Paper Mills and others. The stories about these sales are almost pathetic. What happened to the money? For example, the Ajaokuta Mill – after spending nearly US$50 billion on it, what did we sell it for? And then we would not allow the buyer to perform his business and produce steel. He took us to court. We would have to pay compensation.

Governors whose reckless spending put us in this economic predicament should be the last people to suggest sale of assets. These were the people who opposed President Jonathan’s Sovereign Wealth Fund programme when we could have saved substantially, and whose debts to local banks threaten to bankrupt the banks. Governors are a fast moving train with no brakes and no drivers. The result is an inevitable crash. They have no accountability, no obligations except to themselves. Some of them have already sold nearly all their states’ assets; and have left their states littered with unfinished projects.

Where is the thinking that we should work productively and work our way out of recession.

Is money from sale of assets revenue? If so, would it be shared as other revenue through the sharing formula? Is this new sale of assets a campaign to frustrate demand for resource control and restructuring? Let the thinking continue!

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  • Basil Ogbanufe

    1. The sale should be to Nigerians through the NSE by way of IPO so the national assets become public quoted companies.
    2. Through this method the companies and our commonwealth remain in Nigeria with Nigerians managing them transparently, accountably and productively.
    3. Government will cease being operator/manager of the economy and focus solely on regulation.
    4. Governments over the years have been very poor and bad managers of these national assets and our commonwealth. And there are no signs of successive governments deviating from corruption.

  • oyeols

    Asset sales isn’t such a bad idea, if done properly and for the right reasons. Interestingly, even Saudi Arabia indicated interest to sell stakes in some downstream assets in 2015 I believe after the oil price crash. This is a country that holds its oil assets even more tightly than Nigeria.

  • Ayo Faleti

    I agree; any restructuring must abolish the office and designation of a ‘Governor’. Many of the current and previous holders of this office are common criminals with no scruples at all – maybe one or two can stand up to scrutiny but the overwhelming majority of these folks deserve to be locked-up and the keys thrown away.