The Sale of Nigeria’s Assets
The recent announcement by Buhari’s government that it intends to sell some national assets should be received with caution. This is because his government has developed a reputation for saying one thing and doing the opposite. Therefore, there should be more clarification about the details of this sale before the celebration begins.
In June 2015, Buhari announced a bailout for the States who were struggling to meet their financial obligations. At the time, a few experts argued that such bailouts should be contingent on strict terms to ensure that the States did not fall into trouble again. Unfortunately, their advice was ignored. The result was that a few months after, a second round of bailouts had to be provided. As is the usual practice with this Government, there are few details about the beneficiaries of the bailout and the actual conditions attached.
It can thus be seen that this Government has a reputation for secrecy and incoherence when it comes to matters of the economy. Therefore, we must ask probing questions about its plans for the assets sale.
What do they intend to do with the sums raised? This is important because the Government has taken few steps towards reducing its expenditure and making itself sustainable. So there is the real fear, the money raised from the sale will be used to fund its bloated structure. The consequence of this will be, postponing the evil day. So instead of restructuring the government, they would have simply raised money to extend the life of its unsustainable system.
Buhari has history in this regard. He was repeatedly warned that we did not have the FX reserves to defend the naira. He was also warned that we did not have the funds to keep paying for petroleum subsidies. He refused to listen to sound advice and only partially succumbed when it dawned on him that we had reached virtual bankruptcy. Therefore, there is a real risk that with this wind fall from the asset sales, he’ll resort to his old ways of defending the naira and funding subsidies.
If on the other hand they decide to spend the money on infrastructure, we need to know that the sums will be spent equitably. We have heard Buhari make reference to the 97% v 5% division. We have also heard senior APC leaders accuse certain sections of the country of putting their eggs in one basket. We therefore need to be assured that any sums raised will be invested in equitable manner as opposed to spending for the benefit of Buhari’s favoured regions.
Who will manage the funds? My preference is for the funds to be managed by the Sovereign Wealth Fund. This is because they are more likely to invest the money in a manner that focuses on financial viability as opposed to Buhari’s pipe dreams of searching for oil in the Chad basin ( IOC’s spent decades searching for oil there and found nothing).
In conclusion, I think national assets sales are a good idea if they are done for the right reasons. Therefore, I think rather than blindly celebrate Buhari’s announcement, we ought to ask probing questions about his plans before it is too late.
We need to learn the lessons of May 2015. Blind loyalty will lead us into a ditch!