MYNATION EDITORIAL – We need to understand that the cuts in oil production occasioned by militancy, drop in global oil price and the concomitant effect on other sectors of the economy, it has become imperative that urgent measures are taken to bail the country out of recession.
Report has it that the continued free fall in the value of the naira against major currencies has been worrisome. Only last week, it fell to an all-time-low price of N436 to a dollar in the unofficial market. In the last three months, the value of naira in the parallel market has dropped by at least 40 per cent. It is therefore critical that some short term measures, a kind of first aid, are taken to shore up our foreign reserve, which presently is around $26 billion, prop up the naira and reflate the economy.
It clear given the country’s abundant natural resources, it is unthinkable that the nation should now be in doldrums. It is particularly painful considering that the country fared well when agriculture was the mainstay of the economy. Unfortunately, the discovery of crude oil got Nigeria’s lazy rulers distracted from agriculture and made government addicted to free oil money, which it thought would flow endlessly.
Even the billons of dollars generated from oil over the years was mismanaged by leaders, such that their embezzlement, profligacy of the resources is now taking a huge toll on the citizenry. Worst still, most of the foreign exchange earnings from oil were not ploughed back into productive ventures, but were squandered and stolen by this same group of elites.
In 2008, Nigeria’s foreign reserve stood at $62 billion. That was at a time when crude oil price was about N120 per barrel. Today it is a far cry from that as the price of crude hovers around $46.
It is against this backdrop that the suggestion about this time last year to sell about 20-30 percent of national assets by the Central Bank Governor, Mr. Godwin Emefiele is a welcome development. If his advise had been adopted then the naira and the economy would not be on its knees today. Gladly some prominent economists and businessmen like Emefiele’s predecessor, now Emir of Kano, Muhammadu Sanusi II, business mogul, Aliko Dangote, among others, are now in support.
It is gathered as part of efforts to reposition the economy, the experts proposed the sale of some of the nation’s assets to raise $15 to $20 billion to steer the country out of recession. Among the assets are those in country’s joint venture in oil, the Nigerian National Petroleum Corporation, NNPC, the Nigerian Liquefied Natural Gas, NLNG, the refineries, airports and luxury planes in the presidential fleet.
Now MYNATION NEWS supports this bold move and the response it has so far received from the Federal Government. We proposed the immediate sale of a portion of state assets that would yield about $30bn -$40 billion to shore up reserves and boost the nation’s balance sheet to allow funding of critical infrastructure and reflate the economy.
The fierce opposition to the sale by the organized labour and civil societies is well understood. Same is the division among federal lawmakers who have urged President Muhammadu Buhari to ignore the demand and explore other avenues. But the urgency for a solution to the economic problem outweighs such concerns.
MYNATION NEWS advises FG to also urgently take steps to auction off assets seized from looters of state treasury and place funds accrued as well as cash recovered cash into reflating the economy.
We all know at this time when the sale of assets has become inevitable, we cannot afford to have idle funds anywhere in the financial system.
MYNATION NEWS urges that such be channeled into productive ventures to stimulate the economy. Keeping such funds in the CBN without the economy having a feel of the money would be counter-productive.
The Federal Government should assure the international community that the nation is ripe for investment. This can only be achieved if there is a strong foreign reserve and
transparency in the country’s fight against corruption. If the monies recovered from corrupt leaders are not openly committed into building infrastructure for the people’s benefits, foreign investors would not be guaranteed a good return in their investments.
Persons who are opposed to assets shedding should be reminded that the developed economies had resorted to similar measures to navigate out of recession. For instance, when the United States’ economy was in crisis, the country stimulated its economy with about $900 billion, out of which $85 billion was injected monthly over a period of time. Japan and Europe have also taken certain steps to stimulate their economies by ensuring liquidity.
The need to ban certain items that we can produce in the country is a laudable venture. It makes no economic sense to import items like tomatoes, sugar, fish, toothpick etc. which annually consumes about 10 -15 per cent of our import bills.
But there should be a balance between a ban and ensuring that emergency steps are taken to put staple foods on the table of Nigerians. Besides, the Federal Government should cut the over-bearing cost of governance and plough what is saved into the economy.