|African richest business mogul, Aliko Dangote, had in media reports urged the Federal Government to sell off the NLNG and other dormant but huge capital-generating sectors|
Prof. Uche Uwaleke, Head, Banking and Finance Department, Nasarawa State University, Keffi, says the country’s economy has not deteriorated to the extent that government will sell off some of its assets to generate revenue. “I do not think the state of the country’s economy has reached the point where viable national assets such as the NLNG must be sold in order to generate revenue. “If a country is in a liquidity trap to the point where the government loses the capacity to borrow, then it can sell its assets.
“Then a case can be made for the sale of non critical assets at least to keep the government running. “Nigeria is not in any liquidity trap and so the issue of selling performing national assets should not arise. “The NLNG is not known to have posed any burden on government resources, as a matter of fact; the company has a record of regular dividend payments to the government. “So, why sell off the government’s majority stake in the company as has been suggested.
He explained that it was only a bankrupt state that could sell its national assets and Nigeria could not be said to be bankrupt. He said that was the reason the government hoped to borrow from external sources including issuing Eurobonds to revamp the country’s economy. “Notwithstanding the high ratio of debt service to government revenue, the ratio of the country’s debt stock to GDP at less than 25% is within sustainable level. “And it is one among the lowest in the world,’’ Uwaleke added.
African richest business mogul, Aliko Dangote, had in media reports urged the Federal Government to sell off the NLNG and other dormant but huge capital-generating sectors. He suggested that government should invest the proceeds back into the economy to bring Nigeria out of its current recession before the end of fourth quarter. “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. “What we need to do now in my own thinking… we have a lot of assets to sell. We can sell part of the joint venture; part of the shares. You know government normally owns 60 percent,” Dangote said.
On the way forward, Uwaleke, however, urged the government to apply both monetary and fiscal stimulus to tackle the recession. He also urged the Central Bank of Nigeria to ease the monetary policies to enable SMEs get cheaper access to funds to do business and strengthen the country’s currency. “On the fiscal side, the Federal Government should move speedily to obtain concessional foreign loans that should be channeled into employment generating activities such as agriculture, solid minerals and infrastructure. “Committed efforts in these areas will ultimately open up multiple streams of foreign exchange and strengthen the naira in the process,’’ Uwaleke said. He said that any attempt to dispose viable government assets to temporarily shore up reserves could create the wrong impression for the country.