Saraki backs calls for oil asset sales
The Senate President, Dr Bukola Saraki, has supported the calls for the sales of oil assets of the Federal Government to tackle the current economic recession ravaging the country.
It was the richest man in Africa, Alhaji Aliko Dangote who first flew the kite and it has become a sing song for many notable people in the country.
According to him in an interview with Reuters, Nigeria must consider selling stakes in joint ventures with oil majors and other assets as talks to borrow abroad have not succeeded yet and would in any case not generate enough funds to stimulate economic recovery.
He is also of the view that the country might struggle with recession for up to nine months or even longer unless it got serious about attracting investors.
The government said this month it had approved loans from China, the World Bank, Japan and the African Development Bank, but Saraki, whose relations with the president have cooled since last year, said such talks were still ongoing with no deals yet.
“There is a big hole now in the fiscal deficit because that funding is not coming through. So we’ve got to look for alternative ways to fund that,” Saraki said in the interview on Monday when asked about the loans.
The government has said it plans to borrow as much as $10 billion, with half of that coming from foreign sources, including a planned $1 billion Eurobond issue, to fund a budget deficit of 2.2 trillion naira ($7.21 billion) and boost an economy hammered by low oil prices and hard currency shortages.
Saraki said that even if the loan talks succeeded, the amount raised would not be enough to plug the hole in public finances. “My take is that even if it does come through, it’s money too little, too late,” he said, referring to the loan talks.
He said Nigeria needed to sell stakes in oil and gas joint ventures, oil exploration contracts and refineries to raise funds. “In my view, I really can’t see any other pathway to recovery. We need investors, we need to raise capital.”
Such an asset sale would be necessary even if global crude prices recovered to $70 a barrel and Nigeria managed to restore oil production to 2 million barrels per day (bpd) with an end to militant attacks in the Niger Delta oil hub, Saraki said.
Saraki said Nigeria could overcome recession in six to nine months if swift action was taken — a more downcast view than that of the government, which has forecast a quick recovery.
“If we do things right, the confidence will come in,” Saraki said. “If we carry on waiting for government revenues to go up, if we don’t do anything seen as thinking out of the box” the recession could drag on longer.
Speaking at CNBC programme last week Dangote said: “I think the real challenge for us is now for us to have the political will in terms of selling some assets”.
“If I had challenges in my company, I would not hesitate to sell assets, to remain afloat, to get to the better times, because it doesn’t make any sense for me to keep any assets and then suffocate the whole organisation,” Dangote said.
“I think it’s an easier route than the IMF (International Monetary Fund) or the World Bank to borrow money, because what you need to do is actually to beef up the reserves.”
He urged the government to sell assets in some of its joint ventures with the private sector in an open tender process. He said that Africa Finance Corporation – a development finance institution established in 2007 – would fetch close to $800 million.
He said policy makers should also look to sell 100 per cent of the country’s stake in Nigeria LNG Limited, a natural resources firm.
According to him Nigeria, which rivals South Africa to be the continent’s biggest economy, should have been diversified a long time ago. He lamented the nation’s over reliance on oil.
He is, however, optimistic that Nigeria would exit recession in the fourth quarter of this year and said the country “had all the answers” to bounce back to health.
Dangote is worth $12.5 billion and is the richest man in Africa, according to Forbes. He is the owner Dangote Group, which is believed to be the biggest manufacturing conglomerate in West Africa with interests in commodities.
@WTokede he want buy them, pure and simple
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