RMAFC recommends borrowing from IMF to shore up economy

…Says it’s unwise for govt to sell NLNG, other assets

IMFOscarline Onwuemenyi 28 September 2016, Sweetcrude, Abuja – In disagreeing with suggestions that some of the nation’s assets be sold to stave-off the biting effects of the current economic recession, the Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, has asked the Federal government to rather borrow from the International Monetary Fund, IMF, to shore up the economy.

Africa’s richest man, Aliko Dangote, had called for the sale of government’s stake in the Nigerian Liquefied Natural Gas, NLNG, and some other Federation Assets during an interview with a cable television, CNBC Africa.

This is expected to raise about $10 to $15 billion for the government, according to Dangote, and Senate President Bukola Saraki and Central Bank of Nigeria Governor Godwin Emefiele, who have also backed Dangote’s suggestion.

But, according to the RMAFC, the government could borrow the same amount from international lending organisations like the IMF, and use the revenue from these same assets to repay the loans over 10 to 20 years after which the federation would still retain the assets and continue to enjoy their regular annual dividend payments.

Acting Chairman of the Commission, Mr. Shettima Umar Abba Gana, said in Abuja that it would be unwise for the government to dispose of its crown jewels that generate revenue and keep the Federation Account healthy over the long term.

Citing the NEITI 2013 audit and financial report of Nigeria’s oil and gas industry, RMAFC disclosed that the sum of $12.9 billion was received by the Nigerian National Petroleum Corporation, NNPC, from the NLNG over an eight-year period which the Corporation did not remit to the Federation Account.

The audit, according to the Commission, also revealed that the NLNG paid the sum of $1.289 billion as dividends for 2013.

RMAFC noted that “It is the considered view of the Commission that Nigeria’s Assets like NLNG and other strategic national resources should not be sold to meet a short-term financial obligation.”

However, it said it would consider any bill from the President, as long as it would help the nation out of recession.

The Commission advised that instead of selling off such vital assets which generate funds for the Federation, wealthy Nigerians should be encouraged to set up their own LNG projects, since Nigeria which ranks seventh in the world and first in Africa with natural gas reserves base totalling 188 trillion cubic feet, TCF, as at May 1, 2015.

In addition, Nigeria’s natural gas is regarded as one of the best in the world as it has low hydrogen sulphide or carbon dioxide impurity levels, it stated.

In a recent interview, Africa’s richest man, Dangote, had suggested the sale of the NLNG and some other national assets in order to augment the current revenue shortfall as a result of economic recession.

Senate President, Saraki, also threw his weight behind Dangote on the matter, saying the last administration failed to put things right in respect of the economy, but the current administration should concentrate on how to solve the country’s economic problems.

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