Recession: FG Recants, To Dump Assets Sale Proposal

The federal government has made a U-turn in its proposed bid to dispose national assets to raise money in order to reflate the economy, describing it as mere speculation.

This position was made known by the minister of information, Lai Mohammed, after the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari yesterday, at the Presidential Villa.

This comes barely one week after the National Economic Council (NEC) meeting, presided over by the vice president, Yemi Osinbajo, with 23 state governors in attendance, backed the sale of national assets as one of the ways to raise cash to reflate the economy.

The NEC, which is the highest economic decision making body, also canvassed advance payment of licence renewals, infrastructure concessioning and implementation of fiscal stimulus.

LEADERSHIP recalls that the governor of Central Bank of Nigeria, Godwin Emefiele, had penultimate while confirming government’s plans to sell about 15 per cent of its oil assets held by the Nigerian National Petroleum Corporation (NNPC), which is expected to yield an inflow of $10 billion to the country.

He had said in an interview with top media managers in Lagos that the sale would commence soon. He said the expected income would have been up to $15 billion if the assets were sold earlier in the year and added that a team of consultants had been commissioned to carry out a study on the proposed sale.

Finance minister, Mrs Kemi Adeosun had also told business editors in an interview this week that sale of assets would reduce government borrowing.

Recall also that business mogul, Aliko Dangote, was the first to fly the kite about a fortnight night ago when he advised the federal government to sell some national assets, saying it was a better option for the country than borrowing from the World Bank or IMF. According to him, what the nation needs now is to beef up its reserves. He particularly advised the government to sell the Nigeria Liquefied Natural Gas Ltd.

The Senate, on Tuesday, however rejected the proposal, saying the country was not bankrupt, and wondered why the federal government would consider the sale of national assets as an option.

However, speaking to State House correspondents, the minister of information said that, so far, all the reports were still in the realm of speculation as the federal government had not officially made its decision known on the matter.

According to him, government is still working on how to reflate the economy in the most comprehensive manner and will make its position known very soon.

Mohammed said: “What the government will do is to reflate the economy; everything you have heard so far is just suggestion, until the government makes its position known.

“All these assets sale, assets leasing, whatever is being bandied about, they are nothing but speculations. The government is yet to come out with its position on how to bail out the economy.

“NEC will recommend but it is the Federal Executive Council that will decide, and what we decide will be the position of government,” he added.

FG Lists Conditions For Assets Sale

The Federal Government has given conditions that must be met before the sale of certain national assets.
Top among the conditions is that government will insert repurchasing clauses in the assets sale agreements. A top government source who declined to be named disclosed this.
The National Economic Council (NEC), chaired by Vice President Yemi Osinbajo, had, last Thursday, endorsed government’s plan to sell off some national assets as part of the solution to get Nigeria out of recession and revamp economic growth.
According to the source,  government has also ruled out outright sale of assets.
“The federal government has no plan to sell-off its shares outrightly in the LNG where it owns 49 per cent shares and the balance 51 per cent owned by private foreign interests.
“Government doesn’t own the entire gas company and will certainly not sell-off its entire shares but is open to the possibility of selling its 49 per cent ownership by five per cent or thereabout.”
On the repurchase clause, the source said: “Just as in other potential asset sales, there would be a repurchase option that guarantees the federal government’s opportunity to buy-back any such assets if circumstances change anytime in the future.”
Though a list of national assets to be sold is  yet to be drawn-up, the source said that there is also a clear decision not to sell any critical asset of the country.
“Some of the intended sales could be in form of time-bound leases, advance renewal payments on leasing licenses and concessioning which would attract buoyant signature fees. If we even want to sell  certain assets, while our target is to get foreign currency, specifically dollars, the option would also be opened to Nigerians at some point to buy limited shares through the Nigeria Stock Exchange.”

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