Given the ongoing battles and debates following the contemplation of the Federal Government to sell some of the country’s assets, more and more experts are giving frank analysis to the implications of the proposed actions of the FG. The points were discussed by these experts are brought out below.

 

Professor Akpan Ekpo, Director General of West African Institute for Financial and Economic Management, WAIFEM

  • Sale will lead to higher unemployment rate as several staff will be laid off
  • Only few elite Nigerians with their foreign collaborators will benefit as assets would be sold to them for cheap prices
  • History shows that privatizing government assets does not result in any benefit. A prime and recent example is the Power Holding Company of Nigeria (PHCN) which has only worsened, not helped the power situation
  • Some of the assets listed for sale are actually doing well financially, so why sell profitable ventures?
  • Recessions come and go and even if this goes, another will come, what will be sold then?
  • FG has other sources of loaning funds to implement its budget. These are better options than asset sales

VERDICT: NO SALE

 

Professor Adeola Adenikinju, Professor of Economics, Department of Economics and Director, Centre for Petroleum, Energy Economics and Law at the University of Ibadan

  • Asset sale will increase government income and reduce medium term huge forex spent on imports
  • Divesting assets will allow for injection of funds into the economy and reverse the economy’s contraction
  • However, there is no guarantee that fair prices will be gotten for these assets
  • There is also no guarantee that funds obtained from the sale, if it goes on will be properly managed

VERDICT: SELL BUT TAKE CARE OF VALUATION AND SPENDING ISSUES

 

Dr. Uwaleke, Fellow of ICAN, an Associate Professor of Finance and Deputy Director of Research at the Nasarawa State University, Keffi

  • Support for asset sale negates previous assertions by the economic team about the good chances of the country’s exiting recession by end of 2016
  • Evidence from other countries shows asset sale is only considered an option for countries who are practically bankrupt, which Nigeria is not
  • Other countries like Nigeria facing similar oil price issues without the threat of bankruptcy are planning to sell MINORITY shares in the oil related assets so as to source funds for development elsewhere
  • Any forex obtained from the sale and used to boost foreign reserves will soon be burned off given Nigeria’s importation mania.
  • Forced sale values are definitely going to reduce the amount obtained from such sale and given Nigeria’s history of never selling for the right value even when things were rosy, these assets are likely to be given away almost free.
  • If FG is bent on selling assets, it should consider liabilities like the Presidential fleet, not NLNG the is quite profitable

VERDICT: NO SALE

Standard chartered

 

Professor Charles Soludo, Former CBN Governor and Founder, African Heritage Institution

  • Assets sale would imply cashing pennies for pounds and should be considered as a last resort, a situation Nigeria is not currently in.
  • There is no framework in place for effective use and thus,it is likely that proceeds be squandered
  • Good agricultural proceeds would also lift the economy from recession, so why sell off assets?
  • Asset sale would not restore investor confidence magically and stop speculation on the Naira

VERDICT: NO SALE

 

Chacha Wabara-Ogbobine is a Legal practitioner with over 9years post call experience. A research Consultant, professional writer and a blogger at heart,owner of four thriving websites with well over 10years of experience. Totally in love with keeping fit and coaching weight loss enthusiasts. I love my quiet time, being with my kids, watching TV series for hours on end.

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