Ex-minister Ajumogobia doubts govt’s sincerity in sale of national assets

Former Minister of State for Petroleum Resources, Mr. Odein Ajumogobia has come strongly against campaigns that government stands the chance of raking in, at least $40 billion from sales of national assets.

He hinged his disagreement with the policy on the fact that previous promises of utilising proceeds from similar sales of other assets for the growth of the economy are yet to be kept.

the Organised labour had also expressed opposition to proposals that Nigeria sell off some of its assets, especially in the oil and gas sector.

Ajumogobia, who spoke on Wednesday in Lagos, at the gathering of independent oil operators, under the aegis of Petroleum Club Members’ Evening, said debate had already begun within professionals as to the wisdom in government divesting its interests in all assets at a go.

It could be recalled the Federal Government has been tinkering with the plan to execute its Economic Recovery and Growth Plan (ERGP) from proceeds in reduction of its stakes in joint venture oil assets and sale of refineries and other downstream subsidiaries .

But Ajumogobia said that, if ERGP success is based on the proposed sale of the named stakes, the dream of Nigeria’s early recovery from its economic meltdown will be difficult to actualise.

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In his words: “The argument is, of course, that Nigeria is in recession, oil price diminished, huge obligations on the part of the government and no cash. And it has been suggested that Nigeria can raise up to $40bn by divesting from some of its assets.

“Take for instance the Nigeria LNG has been one of the cash cows of the government and there has been suggestion that if the government reduces its 49 per cent stake in it and also reduces its interest in joint ventures from 60 per cent, that can be said to be significant, but investng the resources directly to the economy is another issue.

“That is one argument, and the other is equally compelling; that we have seen privatisation before: NITEL and Nigeria Airways were privatised; what happened to the money after that?”

The former minister said that more fundamental issues for Nigerians is the issues on constitutional provision that when money is paid into the federation accounts it is distributed among the three tiers of government and not for capital projects.

He stated that it is unlikely that the intentions behind the proposal in the first place will be realised, adding that he had openly supported those opposed to the sale of the named assets without assurance of how the proceeds would be utilised.

However, a spokesman of the organisation, and Managing Director, Seplat Petroleum Development Company , Mr. Austin Avuru, said despite the opposition to the sale of the national assets, it has remained the only means through which Nigeria will easily exit from recession.

According to him, operators in the sector had been able to come out with figures to support the anticipated gains from the sale of the national assets.

They include the fact that more than 80 per cent of government’s take from crude oil production comes from rent, derivable from tax and royalty, while of the 57 per cent that the NNPC is managing in the sector, only 12 per cent returns go back to the government coffers.

“But if you took all of that 57 and a half per cent away and gave it back to the IOCs and they establish more efficiency because the bureaucracy is reduced, we have demonstrated that government’s take will actually be higher than it is when it is retaining 57 per cent.

“It is to create efficiency; remove the bottlenecks that are bedeviling the industry and actually deliver more money to the government,” Avuru added.

 

 

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