Nigeria: Privatise refineries, use proceeds to tackle economic crisis — Adenikinju

*Professor Adeola Adenikinju.

*Professor Adeola Adenikinju.

Ike Amos

30 September 2016, Sweetcrude, Abuja — Energy expert and Professor of Economics, Department of Economics and Director, Centre for Petroleum, Energy Economics and Law at the University of Ibadan, Mr. Adeola Adenikinju, has called on the Federal Government to privatise the refineries and use the proceeds in helping the country escape the current economic recession.

Adenikinju, who was reacting to calls by some individuals for the Federal Government to sell off its stakes in some oil and gas assets, stated that the government can also dispose a substantial amount of its stake in the refineries and other entities.

He said he supports the call for the divestment, stating that the assets that would be sold would not only increase government income, but would, also in the medium term, reduce the huge foreign exchange the country spends on petroleum products imports.

He added that the Federal Government should scout for more of such assets and make them priority in government asset sales.

He said, “I support divestment of some government assets especially at a time like this where there is serious liquidity crunch in the country.

“Government is unable to meet some of its basic commitments. The economy is contracting. There is a need for the injection of funds, especially foreign exchange. Hence, just as some oil companies did in recent time, the country can also divest some of its assets.

“However, the critical factor is the process of divestment. How do we ensure we get fair and just values for the assets? How are we sure that the funds realised from the sale is efficiently utilized for the benefit of the Nigerian economy? These are not trivial issues.”

However, Director-General of the West African Institute for Financial and Economic Management, Professor Akpan Ekpo, warned against the sale of the Nigeria Liquefied Natural Gas Company, NLNG, and other national assets, stating that doing so would not take the country out of the present economic woes.

Ekpo disclosed that if the assets are offered for sale, Nigerian elites with their foreign collaborators would buy the assets to further their primitive accumulation instinct, leading to massive job losses.

He said, “Selling government assets, oil or non-oil, will not take the economy out of the present recession. We have privatized government assets previously and it never worked. We unbundled the PHCN yet power supply remains epileptic. Nigerians need to know the assets to be sold. NLNG for example, is not doing badly so why sell it?

“Previously privatized governments assets are littered all over the country. Selling of government assets would throw thousands of Nigerians into the labour market looking for jobs.

“Recessions are part and parcel of a market economy. What do you sell when another recession sets it? Selling government assets during a recession would only enrich few Nigerians at the expense of the working people.”

Ekpo stated that the present recession provides an opportunity to better manage the economy to minimize its adverse effects, adding that the economy needs structural reforms implemented through a developmental state economic blue-print.

He advised the Federal Government to borrow externally and domestically to finance capital projects, provide states with conditional loans to pay backlog of salaries, hence, addressing both the demand and supply problems of the economy.

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