Nelson A. Osuala [21 September 2016]
The Federal Government of Nigeria did yesterday snub the advise of Nigeria's Business Mogul, Alhaji Aliko Dangote’s proposal to sell off Nigeria’s Liquefied Natural Gas (LNG) and other crown jewels with a view to augment for the Nation's shortfall in revenue, while insisting that borrowing would be a better option.
According to our source, Dangote during an interview with CNBC Africa, advised that to sell off the federal assets would help generate revenues and also in turn wade over the current economic recession.
In response to his claim, the Federal Government via the distinguished leadership of the
Acting Chairman of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Shetima Umar Abba Gana, argued on the contrary, hereby faulting Dangote’s proposal, informed that 'Nigeria’s gas reserves which totals 188 trillion cubic feet, is the best in the world because of its low hydrogen sulphide impurity levels'.
He (Shettima Abba) therefore debunked the advise of the Business Mogul as well as those put forward by the CBN governor, Godwin Ameifele, the latter, who alluded to Dangote's proposal, suggesting that the sale would be in the interest of Nigeria as it would help revamp our dwindling economy.
The Acting Chairman of RMAFC, seems not to be convinced as he thus rejected the proposal of the duo of Dangote and the CBN governor, on the strength of what I am inclined to call a more superior 'logic of economic analysis and normative economic evaluation'.
Below is an excerpt of the Chairman's counter argument as culled from the Sun news website, it reads:
"..Instead of selling Nigeria’s assets, which generate funds to the Federation Account, wealthy Nigerians should be encouraged to set up their own LNG projects.
…it would be unwise for the Federal Government to dispose of its revenue generating crown jewels that keep the Federation Account robust over the long term."
In the same vein, startling revelation from the NEITI 2013 audit and financial report of Nigeria’s oil and gas industry, as put forward by Shettima Abba – has it that the sum of $12.9 billion was received by Nigerian National Petroleum Corporation (NNPC) from the Nigeria Liquefied Natural Gas (NLNG) company over an eight-year period which the corporation did not remit to the Federation Account.
The audit, according to RMAFC also revealed that Nigerian Liquefied Natural Gas (NLNG) company paid the sum of $1.289 billion as dividends for 2013.
In his words:
“It is the considered view of the Commission that Nigeria’s assets like NLNG and other strategic national resources should not be sold to meet short-term financial obligation”
Reacting to a media report in which the CBN Governor, Mr. Godwin Amefiele, indicated that the sum of $10 billion would be realised from the sale of these assets.
The Acting Chairman insisted that , it is his strong believe that the Commission, would fair better if the same amount could be borrowed from the IMF(International Monetary Fund), and the revenue generated from these Federal assets be used to amortise the loans over an agreed period.
He continues:
“It should be noted that after the amortisation of the loans, those assets would still be owned by the Federation in addition to their regular dividends and revenue”.
The Commission advised that instead of selling off such vital assets which generate funds for the federation, wealthy Nigerians should be encouraged to set up their own LNG projects, since Nigeria ranked seventh in the world and first in Africa with natural gas reserves base totalling 188 trillion cubic feet (Tcf) as at May 1, 2015.
In addition, Nigeria’s natural gas is regarded as one of the best in the world as it has low hydrogen sulphide (H2S) or carbon dioxide (CO2) impurity levels." He said.
Should the Economic advise of the CBN governor and those of Aliko Dangote be thrown into the trash can as the Acting Chairman of RAMFC have suggested?
Who amongst the two camps do you think is making more 'sense' especially in this trying times of economic recession in Nigeria?
Tell us your take!
Nelson A Osuala
Is a Blogger & the Associate Editor of Negroidhaven.org
(Negroidhaven)
