National assets for sale

Senate President BukolaSaraki  stirred the hornet’s nest on Tuesday when he made a case for sale of national assets while reeling out a 14-point agenda for economic revival. The Senate President had said: “The Executive must raise capital from asset sales and other sources to shore up foreign reserves. This will calm investors, discourage currency speculation and stabilize the economy.

“The measures should include part sale of NLNG Holdings; reduction of government share in upstream oil joint venture operations; sale of government stake in financial institutions e.g. Africa Finance Corporation; and the privatization and concession of major/regional airports and refineries.”

The suggestion immediately raised the adrenalin among stakeholders, especially as it coincided with similar postulation by business mogul, Alhaji AlikoDangote.

The Organised Labour and the Civil Society immediately gained their voice and hit at the idea. And that is also understandable.

Labour, in this clime will feel threatened by anything that gives a hint of privatisation or outright sale of public assets. The easiest point of blackmail for government has always been that the common patrimony was being sublet to allies of those in power.

Right now, we are almost thrown into a ‘we’ versus ‘them’ environment over the suggestion but that will surely detract from the essence of the debate.

Those opposed to the idea of sale of government assets are already pointing accusing fingers at someone like Dangote, who had stuck out his neck to canvass the idea. While some have opined that those calling for the sale of national assets are persons with deep pockets who could partake in the purchase, there is the need to avoid throwing away the baby and the bathwater in this case.

There is always the debate about whether government has business in business or whether the business of government is only to provide enabling environment for businesses to thrive. The two views are right in my estimation. Government should set up businesses but must not directly run them. Its bureaucracy will kill the business and we saw that in the Nigerian Airways, Nigerian Shipping Line and Nigeria Telecommunications(NITEL) among others.

True, the organised Labour would say that the nation gained virtually nothing in the sale of Nigerian Airways and many other corporations privatised or sold in the past. But the same Labour had always stood aside when wrong transactions were being consummated. For instance, the Nigerian Union of Electricity Employees (NUEE) stood by as the nation sold its electricity assets to GENCOS and DISCOS. The workers were more interested in collecting their entitlements than in checking the integrity of the buyers. They were less concerned as clear developmental road maps were missing in the agreement handing over Electricity companies and today, Nigerians are suffering from the shylock regime foisted by the Electricity Distribution Companies which failed to make any further investment after the purchase but are violently seeking profit.

Going by the Nigerian situation, government should be the largest investor on ground. Much of the petro dollars earned over the years should have been invested locally and offshore. Rather than seek to muscle the call for sale of national assets, I believe what is needed is a clear view of what we want as a nation. If we want prosperity, the money we make today should be invested for the sake of tomorrow, while we consume just a fraction or less.

In the instant case, I will support the sale of moribund national assets and the refineries would top my list. I will insist the NLNG model be left as it is. This is the company that provided President Muhammadu Buhari the first $2.1 billion he shared to states as bailouts in June 2015. With adjustments here and there, the company can do more.

If we are sincere, whether the Labour approves it or not, nothing should stop the sale of the four refineries right away. It is true that oil workers stalled its sale in 2007, where President Umaru Yar’Adua reversed the sale to Dangote.

I am sure if the sale had been perfected, Dangote would have revived the moribund refineries by now and he won’t need to source another $17 billion to build the Lagos refinery set to commence operation in 2018.

That we have refineries have become a curse rather than blessing in recent years. The refineries were there from 2012 when Nigeria spent trillions annually in the name of fuel subsidy. The refineries are in place in 2015 when the nation spent over N500 billion on subsidy. Even now, nobody has told us how much the Minister of State for Petroleum, Dr Ibe Kachikwu has expended on the Turn Around Maintenance (TAM) of the refineries, yet, we are condemned to fuel importation. Should anything stop the sale of these refineries which I am sure since General Sani Abacha’s years have gulped hundreds of billions of dollars in Turn-Around Maintenance?

The critical question though is this: where do you put the money raised from sale of government assets? Put the money in Foreign Reserves or Federation Account and you are doomed. Such monies should be invested in the Sovereign Wealth Fund (SWF) or invested in lucrative offshore businesses that would yield fast. Saudi Arabia, which is contemplating the sale of five percent of its oil assets is thinking of SWF and blue chip investments rather than slamming the money on the table for sharing.