Nigerian government okay assets sale to fight recession

*Some Government assets.

*Some Government assets.

*N/Assembly to pass resolution Tuesday

24 September 2016, Lagos —
The National Economic Council has approved a federal government plan to sell some national assets and inject the proceeds into the economy.

This drastic step is aimed at tackling the current economic recession, a statement from the office of the Vice President, Yemi Osinbajo, said yesterday.

There have been calls on the federal government to sell its assets as part of measures to take the economy out of recession.

The Senate President Bukola Saraki and Africa’s richest man Aliko Dangote are the fore-front of those making such calls. The Emir of Kano, Muhammad Sanusi II has also thrown his weight behind such suggestions.

But the Revenue Mobilization Allocation and Fiscal Commission rejected the suggestion, saying doing so would be unwise. Some senators who spoke during a debate also faulted Saraki.

The Nigeria Labour Congress (NLC) has also kicked against the suggestion that the shares, along with other sovereign assets in the oil and aviation sectors, should be sold as a way of stemming the current economic recession.The NLC, yesterday in a statement, signed by its president, comrade Ayuba Wabba said that the calls are unacceptable to the Nigeria Labour Congress, saying the investments in the LNLG and Joint Venture oil upstream operations are profitable and represent potential sources of revenue into the future.

Other measures approved by the council, which is headed by the Vice President, are:
• Advance payment of license renewals
• Infrastructure concessioning
• Use of recovered funds, etc to reduce funding gaps
• Implementation of Fiscal Stimulus/Budget Priorities
• Fast-track procedures through legislation and implementation of Strategic Implementation Plan (SIP) of the budget
• Meaningful diversification of the economy and cut down on importation
• The Budget and National Planning Minister Udoma Udoma presented the plan to the council, according to the vice president’s spokesman, Laolu Akande who issued the statement.

He said the council endorsed the plan and praised the economic team for doing a good job.

He said: The NEC “generally welcomed the presentation and expressed support for the plans to steer the nation out of recession.”

Akande quoted Udoma as blaming the recession on oil price fall to less than $30 per barrel in the first quarter of the year.

He said the minister, however, told the council that the current crisis was an opportunity to restructure and reset the economy.

The assets to be sold off have not been mentioned but in recent weeks speculations have centred on oil based assets such as Nigeria LNG and refineries. One recent report said the government hoped to raise about $50 billion from the sale of such assets.

Also during the week, the government announced that it has concession the Nigerian Railway to General Electric.

The minister of finance also presented another plan on Public/Private Partnership on affordable housing. The objectives are to:
• Target N1 billion fund to operate PPP (N500 billion initial) in order to create a blended pool of long-term funds to intervene in housing development finance and mortgage provision
• Obtain funds aimed at delivering family housing priced from as low as N2.5 million up to N18 million delivered in a ready to occupy condition with essential services (water and power connected)
• The delivery target is 400,000 to 500,000 housing units per annum
• The ultimate aim of the programme is to channel funds from savers to borrowers, so that builders will have the required capital to construct and prospective buyers can access credit to purchase
• The fund will attract low cost local and international capital, including from domestic pension and insurance funds, FG funding, as well as contributions from State Governments and other agencies.
• The states are to designate a liaison with whom Family Homes Fund can interface and expedite building plan approval process and security of land title as well as invest in enabling infrastructure such as federal roads
Some of the other benefits are improved urban planning and development, employment generation and skills enhancement as well as the expansion of tax base.

The minister reported to the council that balance in the Excess Crude Account is USD 2.453 billion, as at September 20, 2016.
The council is composed of governors of all 36 states of the federation as well as the governor of the Central Bank of Nigeria.

*Isiaka Wakili, Ismail Mudashir & Mustapha Suleiman – Daily Trust

About the Author