On the planned sale of 36 national properties

 

Last Thursday, February 18, 2021, Premium Times, an online newspaper in Nigeria, published an exclusive story on the Federal Government’s planned sale of 36 properties in order to partly fund this year’s budget. According to the newspaper, the Nigerian government is proposing to sell or concession no fewer than 36 of its properties to raise funds, largely to finance the 2021 budget. These properties cut across energy, industries, communication and infrastructural sectors. They are expected to be sold or concessioned between January 2021 and November 2022, it is reported.

The document was reportedly submitted to the National Assembly by the federal executive arm and titled, “NCP Approved 2021 Work Plan.” It shows the names of the “projects” (as described by the document), the sale strategy, the duration of the process as well as the cost of the properties. Top among the properties are the Abuja Environmental Protection Board, the Abuja International Conference Centre, some unnamed refineries, the Transmission Company of Nigeria, Abuja Water Board, Nigerian Film Corporation, among others.

As stated earlier, the decision to sell or concession these properties is to help fund the Federal Government’s N13.58 trillion 2021 budget signed by the President, Major General Muhammadu Buhari (retd.), on December 31, 2020. There are however, different sale strategies for the properties. While some are ‘core investor sales’, a few others are for ‘share sales’. Some are for ‘concessioning’ and others are for ‘full or partial commercialisation’. Some properties have been enlisted to be sold to a ‘willing buyer’. The newspaper went on to give a breakdown of the properties and their prices. They were categorised into five departments, namely; energy with nine projects, industries and communications department with eight projects and development institutions and natural resources with six projects. A total of N3.3bn is expected to be earned from the sale of the properties.

The proposal earned the support of former Vice President, Atiku Abubakar. In a statement titled, ‘Privatisation of Refineries and Other Assets: Better Late Than Never,’ Atiku expressed delight that the privatisation of public assets which he once championed and was scorned for by the All Progressives Congress-led regime is now being embraced by the same regime. He was quoted as saying, “As chairman of the National Council on Privatisation, I advanced these policies which saw our economy achieve six per cent GDP growth and created jobs for the masses of our people and amass the national wealth that enabled us exit the debt trap, and secure our financial independence.”

On the other hand, Socio-Economic Rights and Accountability Project has expressed its fierce opposition to the plan.  SERAP wrote to the National Assembly asking it to stop the President from selling off national properties – an act which it said would amount to a fundamental breach of constitutional and fiduciary duties. Rather than sell national properties or borrow, SERAP proposed a cut in the cost of governance in areas like lawmakers’ salaries, constituency allowance, wardrobe allowance, recess allowance and entertainment allowance – to help generate revenue. Describing the sale plan as counter-productive, the organisation said the process would be vulnerable to corruption and mismanagement, undermine the social contract with Nigerians, leave the government worse off and hurt the country in the long run.

I am of the considered view that the time has come for government to offload or sell off some of these properties which have ceased to be asset as they have turned liabilities. Take the refineries for instance, Nigeria’s four refineries located in Port Harcourt, Warri and Kaduna have been a drainpipe for several decades now. I dare say since the 1990s when Nigeria started importation of refined petroleum products and payment of subsidies on them, the refineries have ceased to be productive. Millions of dollars have been spent on their turnaround maintenance without nothing much to show for it. I believe none of the four refineries have produced anything beyond 20 per cent of their capacity utilisation in over 20 years. Yet, there are workers being paid fat salaries without doing anything at these refineries. Former President Olusegun Obasanjo did sell Port Harcourt and Kaduna refineries off to Dangote’s Bluestar Consortium in 2007 but labour unions and a section of the civil society pressured the late President Umaru Yar’Adua to rescind that decision. I do hope the labour unions have learnt their lessons and will not mount another opposition to the sale of these 36 Federal Government properties this time around.

I believe that what every well-meaning Nigerians should do is to follow through the privatisation process to ensure that they are transparently done and the proceeds from the sales are judiciously spent. Two things are to be achieved with these planned sales: One, revenue will accrue to the Federal Government’s treasury. Two, budgetary allocation to these companies will stop, thereby saving the country some more money. I am here talking of ideal situation which again is uncommon in Nigeria. The reason some people are against privatisation and commercialisation is the way previous ones have been handled. In time past, some of these assets were sold off or concessioned to cronies of people in government who lack the technical, financial and managerial abilities to turn around the dwindling fortunes of these public corporations.  That’s the more reason government must act like Ceaser’s wife, be above board, in the sale and concessioning of this round of privatisation and commersialisation exercise.

I have been an advocate of the implementation of the Oronsaye report on merger and acquisition of the Federal Government enterprises and agencies. Incidentally, the President ordered the implementation of that report last April. News reports have it that he approved the implementation of a report submitted by the presidential committee on restructuring and rationalisation of Federal Government parastatals, commissions and agencies during the Goodluck Jonathan administration. Commonly called the Oransaye report, the 800-page report had recommended the abolishment and merging of 102 government agencies and parastatals. Zainab Ahmed, the Minister of Finance, Budget and National Planning, told Channels TV on Wednesday, April 29, 2020 that the President’s approval has been forwarded to the head of civil service and secretary to the government of the federation. The planned sale of the aforementioned 36 properties may be one of the steps to be taken in implementing the Oronsaye report.

My take however is that while the sale of the 36 properties is a step in the right direction, it is not far-reaching enough. There are thousands of other abandoned project many of which are mere white elephants that also need to be auctioned off. Recall that a presidential committee in 2011 reported that the number of abandoned Federal Government projects in Nigeria were 11,886. The 20-man Ibrahim Bunu-led projects assessment committee put an estimated cost of N7.78 trillion on the abandoned projects. The central government was reported to have paid N2.696 trillion to contractors for the projects, leaving a balance of about N5tn. Without mincing words, the situation has worsened over the last decade as several other projects have been abandoned. I am therefore advocating that the Federal Government should update the Bunu report, categorise the abandoned projects into those that are likely to be assets or liabilities when completed. The liabilities should be sold off and the proceeds used to complete the ones that will add value to the economy and governance.

A lasting solution to the problem of cash crunch in government is to reduce the cost of governance. I have said time and again that there is a need to reduce the number of planes in the President’s air fleet. More importantly, Nigeria does not need and cannot afford the luxury of having at least one minister per state as prescribed in Section 147 (3) of the 1999 Constitution of the Federal Republic of Nigeria, as amended. Each of the six geopolitical zones can be made to have three ministers each. The Federal Capital Territory should produce one making a total of 19 ministers. What are we doing with the present 43? I have also said that there is a need to review the constitution to reduce the number of senators per state to two instead of the current three, reduce the number of members of House of Representatives from the present 360 to 240. Also, Section 91 of the Constitution which stipulates that members of the state House of Assembly shall consist of not less than 24 and not more than 40 members should be amended to a minimum of 16 and maximum of 30. All these are cost-saving measures that can help to drastically reduce the cost of governance. On top of everything is the need to vigorously fight corruption as revenue leakages and theft accounts for significant increase in the cost of governance.