Former President Olusegun Obasanjo on Tuesday made a number of recommendations to the federal government as the surest way of getting out of the current economic downturn, saying that the government needs to spend less, earn more, and borrow its way out of the recession.
Obasanjo spoke in Abeokuta, the Ogun State capital, yesterday at the National Council on Finance and Economic Development (NACOFED) conference with the theme: “Enhancing Revenue Generation and Obtaining Best Value for Money in Expenditure”.
The former president said: “We are spending more than what we earn, so we must borrow as quickly as possible. Let us meet with those who can lend us under reasonable interests rates.”
He said that what the country was witnessing was not unexpected, adding: “I foresaw it two years go. So let us find out the things we can do without, we should instill discipline to cut spending. Also, when we have inflation, it affects everything including local production.”
He observed that the major problem with Nigeria stemmed from the fact that the country spends more than it earns and had not been able to save for the “rainy day”.
He, however, pointed out that funds could be sourced from outside the country and advised Nigeria to approach its allies that could lend to the country under reasonable terms.
He warned, however, that no nation would part with its funds without observing that the federal government was taking practical steps to institute critical reforms, saying that Nigeria must encourage production to earn more and broaden its revenue base.
He said since the nation was not in control of oil prices, it needed to diversify the economy and concentrate on the things it could control.
Obasanjo, who also spoke on the need to develop agriculture, frowned at policies which had turned the nation into a dumping ground for other countries’ products.
The former president, however, endorsed the proposal on the sale of Nigeria’s strategic national assets in order to get out of the current economic hardship.
According to him, the Nigerian National Petroleum Corporation (NNPC) was run as a personal fiefdom and even the Central Bank of Nigeria (CBN) was run in the same manner, saying: “They (government officials) write notes to the central bank to release funds anytime they need it. But we cannot run the country this way.
“We started NNPC about the same time Norway started Statoil and look at where we are. I said it this morning, two institutions that were not tampered with badly or not tampered with at all in the last six years, is the Nigerian Liquefied Natural Gas (NLNG) company.
“The second one are the pension funds which is going to hit N6 trillion and has captured only 7 million people out of over 20 million wage earners, if we can even double that, you imagine what that can be.”
Continuing, he added: “I see no reason why 49% of NNPC cannot be privatised; don’t give it out to cabals, friends, relations or kith and kin, let it go public so that even my driver can buy 10% of NNPC and if there is a limit to the shares any individual or any corporate organisation can buy, there is nothing wrong with that.
“If this happens, NNPC will then be run like NLNG. NLNG is doing wonderfully well and NNPC was doing very well until we started running it not the way it should be run and if it was run properly in the past, who says it cannot be run that same way in future, so we must prevent recurrence.
“Many people think selling is a bad thing. But I disagree, as you will be restructuring the sector, that is all it is, you’re reorganising the sector.
“You talk of assets that are not doing well, no, if you have to earn money to get yourself out of the situation you are in, you can even sell good assets. So the only thing to sort out is how to go about selling them?
“What worries many Nigerians is their focus on what happened in the past. I wouldn’t be particular, but there are concerns that we sold things before and after that we got ‘K’ leg (local parlance for complications).
“But this one should not have ‘K’ leg because it will be on the stock exchange, you will buy and they will assess how much should be sold.
“May be they want to privatise the ports, I don’t know, but these are things we can look at and get people. The only fear the people would entertain is the ‘mago mago’ (local parlance for fraud), but if there is no mago mago and it is transparent, then there are some advantages to this.”
Obasanjo, however, cautioned that when funds are raised from the asset sales, the manner they are spent and managed by government is just as important.