MEMBERS of organised private sector have differed on calls, by some notable Nigerians, to sell Federal Government stake in Nigeria LNG (NLNG) to rescue the country from recession.
Speaking with Tribune Online on Tuesday in Lagos, The Chief Executive Officer (CEO), HIP Investment and Trust Ltd., Mr Rotimi Adebiyi, said it is in order to sell government stake in some assets.
According to him “Why not? We are in a recession. Government should sell some assets to raise cash and finance building of infrastructure. We need to pump money into the economy in other to get out of the recession.
“Take a look at Oando Plc; they just announced selling of Oando Gas and Power to Helius. This will help them to finance other projects. I think the Nigerian National Petroleum Corporation (NNPC) should also be privatised and even the refineries. Look at Saudi Arabia’s Aramco, it is raising Initial Public Offer to the investors. It means the national oil company is privatized. The same with Gatwick Airport, it is not owned by the British Government. It is owned and managed by private investors.
“Though, I don’t believe in outright sale of these assets, especially the Nigerian LNG (NLNG), because NLNG has remitted huge taxes and dividends to the country which runs into billions of dollars. But part sale of government’s stake in these assets will be good for the country.”
Besides, the Head of Research, Ecobank Plc, Dolapo Oni, argued against selling of government’s stake in oil assets due to their role in financing government spending overtime. According to him, “If you look at what NLNG has paid in dividend and tax, you will agree with me that it is very vital in financing government spending. In few years’ time, whatever you may realise as sales proceeds now will be paid in few year’s time as dividend. So, outright sales should not be adopted.”
The President of the Senate, Bukola Saraki, had recommended the sale of some national assets and the utilisation of proceeds for infrastructure development. He said this was necessary for the nation to fight its way out of the current recession.
“The executive must raise capital from asset sales and other sources to shore up foreign reserves. This will calm investors, discourage currency speculation and stabilise the economy.
“The measures should include part sale of NLNG Holdings; reduction of government share in upstream oil joint venture operation; government stake in financial institutions, and the privatisation and concessions of major/regional airports and refineries.”
Recently, Aliko Dangote said in an interview with CNBC Africa, that “The only way for us to get out of this recession is to make sure we move into action quickly; action by diversifying the economy quickly.
“If I had challenges in my company, I would not hesitate to sell assets, to remain afloat, to get to the better times, because it doesn’t make any sense for me to keep any assets and then suffocate the whole organisation.
“What we need to do now in my own thinking… we have a lot of assets to sell. We can sell part of the joint venture; part of the shares. You know government normally owns 60 per cent. We can sell in an open tender be it Chinese. We can change the term and make it an operating one, just like what we have in NLNG. We also have another asset I think we don’t really need.
“The African finance corporation; it can fetch them $800million easily. My own suggestion before was that they should even sell 100 per cent of NLNG. I don’t think government should be in any business of investing in sectors of LNG.”