How To Get Nigeria Out Of Recession: Dangote’s Selfish Postulation

Buhari

Dangote

The richest man in Africa, Alhaji Aliko Dangote has said that the only way Nigeria can get out of recession quickly is by selling federal government’s assets. He spoke with CNBC. He recommended the sale of NLNG to raise about $15billion to beef up nation’s reserve.

You can guess that the man must be positioning himself to buy it. I consider the recommended figure of $15billion as his public bidding for the NLNG and this probably is exciting President Muhammadu Buhari’s ‘Economic Team’ of mostly lawyers.

But Nigerians need to be reminded that the NLNG is the most profitable oil company owned by the federal government. Recall that in 2014 Nigeria LNG (NLNG), the country’s liquefied natural gas exporter, came out the top rated indigenous company in the ranking of companies in Nigeria by business development and marketing consultants, Jake Riley, in partnership with the country’s Federal Ministry of Industry, Trade and Investment (FMITI).
While international oil companies, ExxonMobil, Shell and Chevron took the top three spots, NLNG came fourth, leading other Nigerian companies in the blue chip listing. Other local and international establishments that made up the top ten of the ranking were Total Nigeria, MTN, Dangote Group, OandO, Eni-Agip and First Bank Nigeria Plc. The companies in the top 100 according to the then Minister of Trade and Investment, Olusegun Aganga contributed some 20 per cent to the country’s gross domestic product (GDP).
To rate the companies, the Top 100 Businesses Assessment Committee, headed by Executive Secretary and Chief Executive Officer of the Financial Reporting Council (FRC) Mr. Jim Obazee, was said to have collated and verified information from annual reports, the Financial Reporting Council, the Nigerian Stock Exchange and reports from private companies that publish revenue figures, to decide the winners.
Note that Dangote’s recommendation is coming shortly after the Economic Team of President Muhammadu Buhari also recommended legislation by the National Assembly to give the President sweeping Economic Emergency Powers to supposedly rescue Nigeria’s economy from recession. One of the recommendations was that the president should be give powers to sell federal government’s assets at home and abroad, ostensibly without the oversight interference of the National Assembly, to in their opinion raise funds to galvanize the economy.
The witch cried last night and the baby is dead in the morning. I think there is a link between the Economic Team’s recommendations and Dangote’s call for the sale of NLNG at the cost of $15billion. Recall that President Buhari said why he did not include the private sector in his economic team is because they are selfish and are most likely to bring in suggestions that would favour their private businesses at the detriment of the nation. That well intentioned position of Buhari may have failed as it seemed that some in the private sector may be influencing the team from outside.
I believe that federal government need not sale its assets to come out of recession, especially its most profitable asset in the oil industry where NNPC has mismanaged all the nation’s four refineries, but NLNG had remained profitable and its equipment maintained religiously since it was established. According to industry analysts the return on investment on the NLNG is unprecedented for a company owned largely by government. Nigeria will lose a major asset if it sales NLNG to private sector especially when it is still profitable. The usual practice is to sale unprofitable government assets to the private sector and not the other way round.
Another reason I am opposed to sale of government assets is that the federal government has acknowledged that it was the militancy in Niger Delta that caused the economic recession in the country. This much was admitted by Vice President Yemi Osinbajo at the Presidential Quarterly Business Forum in Abuja. For the economy to rebound the government needs to engage in constructive dialogue with the militants and the nation’s oil output will return to normalcy and the petro-dollars will start rolling in. At the present level of militancy and output of oil, it would take a barrel selling at $100 or more for Nigeria to come out of this recession quickly. That can only happen if there is a major war between Israel and the Arab World. There is no possibility of that for now. The government also claimed that it has saved N3trillion from Treasury Single Account (TSA); N1.4trillion from petroleum subsidy and several trillions of naira from Ghost Workers, not to mention the trillions of naira allegedly recovered from pubic officials in the last administration.
What the country must seek is peace in Niger Delta, and the injection of TSA money, savings from petroleum subsidy; and recovered loots among others into the economy to come out of recession. Of course the diversification of the economy must also be pursued simultaneously. Not forgotten is the reversal of this administration’s economic policies that have driven away many foreign investors while local investors especially manufacturers are finding it difficult to import needed equipment and materials to keep afloat.