Governor of the central bank of Nigeria (CBN), Godwin Emefiele and Nigerian Senate President, Bukola Saraki, have supported the idea for the sale of national assets, in a bid to break out of the current recession.
On Friday, Aliko Dangote, Africa’s richest man, had called on Nigerian government to sell its stake in the Nigeria Liquified Natural Gas Limited (NLNG) to improve foreign reserves.
And speaking at an interview in Lagos, Emefiele said as early as April, 2015 he had thought of the option, and he is favourably disposed to the concept.
“In the short run, we can sell assets. you will recall that as at April 2015, I had an interview with financial Times of London during which even before the government came on board, I had suggested that there was need for the government to scale down or sell off some of its investments in oil and gas, significantly in the NNPC and NLNG as at that point when the price of oil was around $50-$55 per barrel,” he said.
“We really commissioned some consultants that conducted the study and at the end of that study we were told that if we sold 100 pc to 15 of our holding in the oil and gas sector, we may realize up to $40b,” he said.
“Unfortunately, the markets became soft. Now if we choose to do that now, we might still get $10-$15b or even $20b.”
Emefiele expressed that the sale should be done with “buy-back” clause, so the government could recover the asset in a time of boom.
“I would assume that that option is still on the table as a result of more people, even in the cabinet, have made a similar suggestion and if it happens, that will be fine, including the option to buy back the assets at some premium if we ponder buying back when the crude costs move up and the the assets value also moves up.
“You understand that in government, there are those against and those in favour. The argument in favour of marketing the assets has gained lots of credence recently.”
Saraki, on the other hand, quoted by Financial Times as adding “asset sales could help avoid a worst-case situation of coming into an international monetary fund programme”.
“The singular method we are using of borrowing obviously is not working,” Saraki said, while calling on the executive to “look for other ways”.
Nigeria is in its worst ailing economic recession in 29 years, and is presently facing challenges in plugging its deficit budget.