The Senate on Tuesday rejected the proposal by the National Executive Council to sell some of the country’s assets to shore up the foreign reserves as part of measures to bring the nation out of recession.
The President of the Senate, Senator Bukola Saraki, in his opening speech after a two-month-long recess last week, had joined the call for the sale of some national assets to boost the economy.
The Senate, which affirmed that there was the need to shore up the country’s foreign reserves, however, rejected the sale of the national assets, stating that such assets could fall into wrong hands.
Members of the Senate, while voting on the recommendations of the Ad Hoc Committee on the State of the Economy chaired by Senator Yahaya Abdullahi, urged the Executive to apply other measures to manage the economic crisis.
The committee recommended that the Executive should “urgently raise capital to shore up the nation’s foreign reserves in order to discourage currency speculation and stabilise the economy.”
It added, “In this regard, the Senate, aware of the controversy the issue of the sale of assets has generated, but we still believe that given the severity of the crisis that faces the nation, this issue deserves sober reconsideration.
“It may involve parting with moribund and loss-making assets in the sale agreements that contain buy-back clauses, partial sale of interests in ongoing ventures and financial institutions, etc.”
The committee warned that the “very sensitive” issue should be approached with a commitment to protecting the common patrimony of Nigerians by preventing the assets from falling into the hands of “sharks, asset-strippers and cannibals, while also guarding against the fuelling of further inequality in the society and polity.”
The committee also recommended that “the Executive should, as a matter of urgency, prepare an Economic Stimulus Bill containing all the fiscal stimulus packages, investments and incentives designed to pull the country out of recession and send to the National Assembly for accelerated consideration and passage.
“The fiscal and monetary authorities must meet to harmonise all policies that lower interest rates for genuine investors in the real sector as well as medium and small-scale farmers and processors.”
A political economist, Prof. Pat Utomi, on his part, urged the Federal Government to try and give out some critical national assets to private investors as concessions rather than selling them outright.
In an online interview with one of our correspondents in Abuja on Tuesday, Utomi said Nigeria had not had a good experience with assets disposal as a few leaders had appropriated such assets in the past.
He said, “The matter of sale of assets is highly nuanced and can result in labelling. The bottom line is that such a sale at this time is laced with much un-wisdom. This is not because we do not need to generate liquidity to give new life to our challenged current account situation, which is deepening the foreign exchange crisis.
“The truth is that a history of abusive transfer of public assets to private welfare of citizens, regulatory capture in which authority has been used to appropriate the assets of others, and suspicion of motives of extant players will make such a move deepen the crisis of capitalism in Nigeria.
“What I prefer as a result is not to reward those who have mismanaged the commonwealth with their acquisition of such assets as has been repeatedly the outcome of such exercises, but to have select assets conceded to the leading global player for a specific period during which they keep a portion of the profits, while enhancing the value of the such assets.”
Utomi said with the concession of assets, Nigeria could borrow against such assets to bring liquidity to critical markets and simulate the economy in careful support of job creating initiatives that also move the nation into a diversification mode away from oil dependence.